Mortgage Financing for Self-Employed Contractors in Des Moines, Iowa

Scan the loan types below, pick the one that matches how your income looks on paper right now, and follow that link — the guides go deep so this page doesn't have to.

What to know before you choose a loan path

The core problem for most Des Moines contractors is simple: you likely earn good money, but your tax returns — loaded with legitimate write-offs for tools, vehicles, and subcontractors — show far less of it. Conventional underwriting reads your Schedule C net income, not your gross revenue. A contractor clearing $140,000 a year in deposits can look like a $60,000 earner after deductions, and that gap is what kills deals at traditional banks.

Knowing which loan type fits your paperwork situation is the real first decision.

Conventional and FHA loans — when they work for contractors

Conventional loans require a minimum 620–640 FICO and use two years of tax returns averaged together. If your write-offs are modest and your adjusted gross income is strong both years, a conventional loan is still the cheapest path. FHA loans carry the same tax-return documentation requirement but allow a lower down payment (3.5%) and are more forgiving on FICO — useful if you're earlier in your credit-building phase. The catch: both programs will use your taxable net, and if Year 1 income is significantly lower than Year 2, lenders average them, which can push qualifying income down further.

Bank statement mortgages — the most common fix for heavy write-offs

A bank statement mortgage lets the lender use 12–24 months of personal or business bank deposits as your income documentation instead of tax returns. Underwriters apply an expense ratio (often 50% for sole proprietors) to your gross deposits to arrive at qualifying income. The math works in your favor when your gross cash flow is strong even if your taxable income isn't. Rates run 1–2 percentage points above conventional, and most lenders want 6–12 months of mortgage payments in liquid reserves. Closing timelines are similar to conventional — typically 30–45 days with a responsive lender.

1099-only and non-QM stated-income programs

If your business deposits are commingled or irregular, some non-QM lenders will qualify you on 1099 forms alone or on a CPA-prepared profit-and-loss statement. These programs share the same rate premium as bank statement loans and carry comparable contractor home loan requirements in 2026 around reserves and down payment — generally 10–25% down depending on credit profile. They're the right call when your bank statements include a lot of pass-through payments that inflate the deposit total without reflecting true income.

Quick comparison

	Conventional / FHA	Bank Statement	1099 / Non-QM
Income doc	2 years tax returns	12–24 mo. deposits	1099s or P&L
Min. FICO	620–640	620–640	620+
Down payment	3.5–20%	10–25%	10–25%
Rate vs. conventional	Baseline	+1–2 pts	+1–2 pts
Reserves required	2–3 months	6–12 months	6–12 months
Best fit	Low write-offs, clean returns	Heavy deductions, strong cash flow	Irregular deposits, 1099-heavy

What trips people up in Des Moines specifically

Iowa's construction market is heavily seasonal, and lenders who see two months of near-zero deposits in winter sometimes flag income as declining even when the annual total is fine. If you're applying with a bank statement program, consider using 24 months of statements rather than 12 to smooth that seasonal curve. Also worth knowing: Des Moines-area home prices have climbed steadily, so loan amounts increasingly push toward conforming limits — if you're buying above those limits, you'll be in jumbo territory, and non-QM jumbo programs carry stricter reserve requirements than their standard counterparts.

The self-employed mortgage landscape has enough moving parts that getting pre-qualified by a lender who regularly works with 1099 borrowers — not just a general loan officer — makes a real difference. The qualification strategies for mortgage for self-employed contractors are meaningfully different from W-2 underwriting, and lender experience with your income type matters at every stage of the file.

If you're also evaluating business financing alongside your home purchase — a common situation for contractors who need a line of credit at the same time — the business loan and alternative financing options for Des Moines 1099 workers run through programs specific to this market.

Beyond Iowa, contractors in comparable markets like Albuquerque and Alexandria, VA deal with the same documentation challenges — those pages cover regional lender patterns that may inform what to expect here.