Mortgage Financing for Independent Contractors and Self-Employed Construction Professionals in Frisco, Texas

Scan the guides linked below, find the one that matches your income documentation situation, and go straight to the application checklist — you don't need to read all of them. If you're not sure which program fits, the orientation below will sort it out in under five minutes.

What to know before you pick a path

Frisco's housing market is competitive and prices have stayed elevated, which means your loan amount matters as much as your rate. For self-employed contractors and construction business owners, the core problem is the same everywhere: conventional underwriting uses your taxable income, not your gross revenue. Aggressive write-offs — equipment depreciation, vehicle expenses, subcontractor costs — that reduce your tax bill also reduce the income a conventional lender will count. A sole proprietor who grosses $220,000 but nets $95,000 after deductions qualifies for a much smaller loan than their actual cash flow warrants.

That gap is exactly what alternative documentation mortgages exist to close.

The main loan types available to contractors in 2026

Program	Income proof required	Min. FICO	Typical down payment	Rate vs. conventional
Conventional (Fannie/Freddie)	2 years tax returns, Schedule C/K-1	620–640	3–20%	Baseline
FHA	2 years tax returns	580 (3.5% down)	3.5–10%	Slightly above conventional
Bank statement (non-QM)	12 months personal or business statements	620+	10–25%	+1–2 pts above conventional
1099 mortgage	1–2 years of 1099s	620+	10–20%	+1–2 pts above conventional
DSCR (investment property)	Rental income vs. debt service — no personal income docs	640+	20–25%	+1–2 pts above conventional

What trips people up in each lane

Conventional and FHA are cheapest on rate, but they punish write-offs. Two consecutive years of strong Schedule C net income with no big swings between years is the bar. A year where you bought a lot of equipment (Section 179 deductions, capped at $1,220,000 in 2026) can crater your qualifying income even if you had a great business year.

Bank statement loans average 12 months of deposits and apply an expense factor — typically 50% for sole proprietors, 70–90% for businesses with verifiable expenses. The resulting number becomes your qualifying income. Rates run 1–2 percentage points above conventional, and lenders want to see 6–12 months of mortgage payments in liquid reserves at closing. These programs are increasingly common, and many non-QM lenders have regional underwriters who understand that a Texas framing contractor's deposit pattern looks nothing like a salaried employee's.

1099 mortgage programs work similarly but use your 1099 earnings directly. They're a natural fit if you work consistently for a handful of general contractors and receive predictable 1099s each year — common among specialty trade contractors in the DFW growth corridor.

DSCR loans flip the model entirely: the property's rental income has to cover the debt service (typically at a 1.0–1.25x ratio), and your personal income isn't underwritten at all. If you're buying an investment property alongside your primary residence, this is worth understanding. Contractors in markets like Amarillo, TX have used DSCR programs to build rental portfolios even during years with heavy business write-offs.

Credit and reserves are the two knobs you control

A FICO above 700 gets you the best non-QM pricing. Below 640, your options shrink fast. Because 1 in 5 credit reports contain errors, pull yours before you start shopping — a dispute resolved before application can move your score more than any rate negotiation. Lenders across non-QM programs want 6–12 months of cash reserves (mortgage payment × months, liquid), so plan accordingly if your business cash is tied up in equipment or receivables.

The strategies self-employed borrowers use across markets — from Albuquerque, NM to Frisco — converge on the same playbook: clean up the credit file, document two years of business deposits, and choose the income documentation method that shows the largest defensible income. The qualification strategies that freelancers and 1099 workers use for home loans apply directly here, with the added advantage that construction contractors often have more documentable business history and higher average revenue than gig-economy workers.

Non-QM loans typically close in 30–45 days — comparable to a conventional loan — so the timeline penalty for going outside agency guidelines is smaller than most contractors expect.

Use the guides linked on this page to go deeper on the program that fits your situation.