New Mexico 1099 Loans: Helping Contractors and Construction Professionals Secure Mortgages

The Rising Need for Flexible Mortgage Solutions in New Mexico’s Construction Economy

New Mexico’s housing and infrastructure markets are thriving. From Albuquerque to Santa Fe and down to Las Cruces, demand for construction services has surged. This growth brings a rise in independent contractors—roofers, electricians, plumbers, HVAC specialists, framers, and general contractors—who form the backbone of New Mexico’s residential and commercial building industry. While these skilled professionals contribute immensely to the economy, many face frustrating barriers when applying for a mortgage.

W-2 income verification doesn’t reflect the way many contractors earn. With fluctuating revenue, seasonal projects, and aggressive write-offs for tools, vehicles, and insurance, their tax returns often fail to capture true earning potential. As a result, banks frequently deny them home financing—even when they’re earning six figures.

This is where 1099 loans and Non QM Loan solutions from lenders like NQM Funding step in to fill the gap.

What Are 1099 Loans and Who Do They Serve?

1099 loans are mortgage products tailored specifically for self-employed individuals or independent contractors who receive IRS Form 1099 rather than W-2s. These include professionals paid per job or as independent business entities, often under an LLC or sole proprietorship.

In New Mexico, common 1099-based professions include:

• Homebuilders and framers
• Residential remodelers
• Solar installation crews
• Electricians and HVAC techs
• Painters and flooring specialists
• Landscaping contractors
• Project-based construction managers

Rather than focusing on W-2s or net income reported on a tax return, 1099 loans evaluate actual cash flow using alternative documentation such as bank statements or profit and loss statements. This approach provides a far more accurate reflection of the borrower’s ability to pay.

How Non QM Lenders Like NQM Funding Offer 1099-Friendly Mortgage Options

At NQM Funding, our Non QM Loan offerings are designed with the independent worker in mind. We understand that income from 1099 employment may vary throughout the year—but that doesn’t make these professionals any less creditworthy.

Our Bank Statement and P&L Loan Programs offer the flexibility that traditional lenders lack. Contractors can qualify using 12 to 24 months of business or personal bank statements, or even P&L-only statements prepared by a licensed CPA or tax preparer. These programs allow borrowers to bypass tax return scrutiny and qualify based on gross monthly deposits.

Key features include:

• LTVs up to 90% for primary homes
• Credit score minimums starting at 620
• No mortgage insurance requirement
• Interest-only options and 30- or 40-year terms
• Loans available for owner-occupied and second homes

Advantages of Offering 1099 Loans for Brokers in the New Mexico Market

For mortgage brokers operating in New Mexico, offering 1099 loans provides a competitive edge. With much of the state’s housing economy driven by trades, self-employed borrowers are in constant need of financing—yet underserved by banks. By specializing in Non QM Loans, brokers can expand their client base, reduce fallout, and build ongoing referral pipelines with real estate professionals and contractors.

Rather than losing deals due to denied traditional financing, brokers can position themselves as problem-solvers who understand the real-world financial landscape of trades-based professionals.

Challenges 1099 Contractors Face with Traditional Lending

A 1099 contractor might earn $150,000 annually, but after equipment depreciation, mileage, subcontractor payments, and insurance costs, their tax return might show $45,000 in net income. Conventional lenders focus only on that final number, not the full context.

Additional hurdles include:

• Large income swings from quarter to quarter
• Delayed payments from clients affecting deposits
• Minimal W-2 wages despite significant bank deposits

Automated underwriting systems frequently flag these borrowers as high-risk, despite strong deposit histories, low debt, and solid credit scores.

Local Focus: Housing, Employment, and Real Estate in New Mexico

In metro areas like Albuquerque and Santa Fe, new construction continues to push housing prices upward. Skilled tradespeople are in demand, yet many can’t secure mortgages for the very homes they help build. In southern hubs like Las Cruces and Roswell, working-class neighborhoods rely heavily on subcontractors to support new developments.

Data from New Mexico’s Department of Workforce Solutions shows a higher-than-average self-employment rate in construction compared to the national average. This makes Non QM Loans not only useful—but essential—in supporting homeownership among the local labor force.

Understanding Documentation Options for Self-Employed Borrowers

Depending on the borrower’s situation, brokers can structure loans using:

• 12 or 24 months of personal or business bank statements
• CPA- or borrower-prepared P&L statements
• A mix of 1099 forms, licensing records, and income letters

Lenders like NQM Funding use average monthly deposits to assess income. Borrowers using personal bank statements must demonstrate business income flowing through their accounts. For business account users, documentation verifying business ownership and expense ratios may be required.

These loans work for primary residences, second homes, or investment properties. Higher LTV options are available for owner-occupied homes, and DSCR loans may apply for investment properties generating rental income.

How to Position 1099 Loans With Borrowers and Realtors

Many borrowers and agents assume that if a contractor was denied once, they’re unqualified. Brokers must reframe this mindset: traditional denial does not equal mortgage rejection—it may simply mean the borrower needs a lender who understands their income structure.

Brokers can partner with realtors to educate the market:

• Explain how alternative documentation works
• Emphasize flexibility and speed of Non QM underwriting
• Present these loans as strategic—not fallback—solutions

This creates trust and positions the broker as a resource for closing difficult but lucrative transactions.

When a 1099 Borrower May Also Benefit from a DSCR Loan

Construction professionals often invest in rental properties or flips. If they own income-producing real estate or want to acquire it, a DSCR Loan may be a better fit.

DSCR loans qualify based on the property’s rental income, not personal income. Contractors using real estate to generate passive income can use this to scale portfolios without complicating their personal financial profile.

What Brokers Need to Package a Strong 1099 Loan File

To increase approval odds and streamline processing, brokers should help borrowers gather:

• 12–24 months of consecutive bank statements
• Proof of business registration, license, or contractor bond
• Signed P&L if applicable
• Clear documentation showing income trends

Encourage borrowers to keep their business and personal income separate when possible, as this simplifies underwriting.

ITIN Opportunities for 1099 Borrowers in New Mexico’s Immigrant Workforce

New Mexico’s workforce includes a high number of immigrant laborers, many of whom operate with ITINs. These individuals often run legitimate contracting businesses or work consistently as independent labor, yet face extreme difficulty in accessing mortgage financing.

With NQM Funding’s Foreign National / ITIN Programs, brokers can offer 1099 borrowers without Social Security Numbers a chance at homeownership. These loans may use alternative forms of credit and emphasize down payment strength and income stability over documentation.

Overcoming Common Objections from Borrowers and Realtors

Many people associate Non QM Loans with high rates or complexity. Brokers should clarify:

• Rates are competitive and based on credit, reserves, and LTV
• Approval focuses on real income, not just tax return optics
• Non QM Loans close fast and offer greater customization

With accurate positioning, objections can become opportunities for education—and closed deals.

Using NQM Funding’s Quick Quote Tool to Prequalify 1099 Borrowers

Brokers working with 1099 clients can quickly assess eligibility using the Quick Quote Tool. By entering estimated income, property type, and credit score, brokers receive a fast scenario review from NQM Funding’s team.

This tool enables prequalification without full documentation upfront, helping build a pipeline and win borrower trust early in the process.

Why Non QM Lending is Vital to New Mexico’s Housing Affordability

While New Mexico maintains some of the most affordable housing markets in the Southwest, rising costs have created a gap between available inventory and financing accessibility. Many buyers, especially trades-based professionals, are priced out of starter homes not because they lack income—but because conventional underwriting overlooks how their income is structured.

Non QM Lenders help bridge that gap. With options for low down payments, common-sense credit evaluation, and documentation flexibility, they restore affordability for working-class borrowers who might otherwise remain renters. This impact is especially significant in smaller New Mexico markets where few traditional lenders understand how to serve self-employed or immigrant clients.

Using Non QM Loans to Grow Contractor Wealth and Financial Stability

Homeownership is one of the strongest wealth-building tools available. For contractors, owning a home not only offers stability, but also strengthens their business profile. It can allow them to refinance for cash to expand their tools, trucks, or workforce, or to access equity for investment property down the road.

Educating 1099 clients about this lifecycle—from first home to future investment—is a service that keeps brokers and lenders like NQM Funding at the heart of their financial journey. Whether it’s using bank statement loans now, DSCR loans later, or leveraging an ITIN to get started, these paths provide long-term financial upside.

Local Outreach and Marketing Strategies for Brokers in New Mexico

To connect with this growing borrower base, brokers should consider hyperlocal marketing strategies such as:

• Partnering with local contractor unions or trade schools
• Hosting bilingual workshops or seminars on home financing
• Advertising in local Spanish-language or industry publications
• Collaborating with real estate agents who work with builders and remodelers

Using marketing language like “mortgages for self-employed” or “buy a home with 1099 income” improves visibility and builds trust. Targeting specific neighborhoods, zip codes, and occupations will also help generate quality leads and boost conversion rates.

Benefits of Relationship-Based Lending in Contractor Communities

Construction professionals are known for tight-knit networks. Once one client closes with a Non QM broker who understands their income and goals, they’re likely to refer colleagues and crew members. This creates a powerful referral web where trust spreads through word-of-mouth rather than traditional advertising.

For brokers, being responsive, educating borrowers, and delivering results positions them not just as a service provider—but as a financial partner. These relationships often lead to second transactions, refinances, or investment deals within 12 to 24 months.

Building Lasting Value Through Non QM Education

Brokers who take time to demystify Non QM Loans build value beyond any one transaction. This can be done through:

• Educational videos or flyers explaining 1099 loan options
• Posting explainer blogs with FAQs for contractors
• Partnering with real estate professionals on joint events

Topics like “How to Use Bank Statements to Qualify for a Mortgage” or “What Contractors Need to Know About Buying a Home” consistently perform well in markets like New Mexico where self-employed professionals make up a large part of the workforce.

Letting prospective clients know that a denied loan isn’t the end—just a signal to find the right lender—can reframe their mindset and restore confidence in their homeownership goals.

Call to Action for Mortgage Professionals

For brokers in New Mexico, specializing in 1099 loans isn’t just smart business—it’s community empowerment. With the right knowledge, tools, and partnerships, brokers can turn complex income scenarios into approved loans and build a long-lasting client base among one of the state’s most active working sectors.

Get started by connecting with NQM Funding and utilizing our Quick Quote Tool to structure scenarios, prequalify borrowers, and grow your presence in the construction and trades community.