Mortgage Financing for Self-Employed Contractors in St. Louis, Missouri

Scan the loan types below, pick the one that matches how your income is documented, and go straight to that guide — every option on this page links to a deeper walkthrough built for contractors.

What to know before you choose a loan program

Most St. Louis contractors run into the same wall: strong gross revenue, aggressive write-offs on Schedule C or the business return, and a net income figure that makes a conventional underwriter laugh. The problem isn't your cash flow — it's the document the IRS produces after you've done everything right as a business owner. The loan programs below are built around that reality.

The main options at a glance

Program	How income is calculated	Best fit
Bank statement mortgage	12–24 months of deposits, averaged	Sole props and S-corps with heavy write-offs
1099-only loan	1099 totals, no Schedule C required	Single-trade subs paid on 1099
DSCR (investment property)	Property rent vs. mortgage payment	Contractors buying rentals, not a primary
Asset-depletion	Liquid assets divided over loan term	Contractors with savings, lower current income
Conventional / FHA	Tax-return net income, 2-year average	Contractors with modest write-offs and W-2 history

Bank statement loans are the workhorse here. Lenders pull 12–24 months of personal or business bank statements, average your deposits, and apply an expense factor (typically 50–75% for business accounts) to arrive at qualifying income. Rates run 1–2 percentage points above a comparable conventional loan in 2026, and closing typically takes 30–45 days — similar to conventional if your paperwork is clean. You'll need 6–12 months of liquid reserves after closing and a minimum FICO around 640–660, though 700+ gets you materially better pricing. These programs are offered by non-QM lenders and a growing number of portfolio banks; the alt-doc mortgage overview on this site walks through how lenders calculate the expense factor and what counts as an acceptable deposit.

1099-only programs work well for subcontractors who receive 1099-NEC forms from general contractors and whose income is relatively consistent from year to year. The lender averages the 1099 totals over 12–24 months rather than looking at a tax return. If you operate under a business entity and commingle funds, a bank statement loan often produces a cleaner qualification.

Conventional and FHA loans aren't off the table — they're just harder to optimize when your write-offs are high. FHA requires a 3.5% down payment and will go down to a 580 FICO (with stricter overlays in practice), while conventional programs floor around 620–640. If your Schedule C net income is solid enough to support the debt-to-income calculation — lenders typically cap total obligations at 43–50% of gross monthly income — conventional pricing is meaningfully lower than non-QM. The gap between FHA and conventional is smaller for contractors than people assume; the FHA vs. conventional comparison for self-employed borrowers on this site covers when each wins.

What trips people up

• Commingled accounts. Running personal and business expenses through one account makes the bank statement calculation messy. Lenders will discount deposits that look like transfers rather than revenue.
• Recent business formation. Most non-QM lenders want to see at least two years of self-employment. A business started in 2024 will face tighter scrutiny in 2026.
• Large recent deposits. A single $40,000 payment from one job can spike one month's average. Lenders look at the trend, and a lumpy 12-month history produces a lower qualifying income than a smooth one.
• Down payment sourcing. Non-QM lenders document where the down payment came from just as conventional lenders do. Cash-out from a previous property, savings, or a gift from family all follow different paper trails.

The same income documentation issues that complicate a mortgage also affect how contractors handle quarterly tax obligations — understanding how your tax payments interact with your cash flow picture matters when you're preparing to apply. Contractors who plan their quarterly tax and cash flow strategy carefully tend to show cleaner, more consistent bank statement deposits, which directly improves the qualifying income a lender will use.

St. Louis has a functional mix of non-QM wholesale lenders, regional portfolio banks (particularly in South City and West County), and credit unions that hold contractor loans in-house. The dynamics here share similarities with other metros where construction trades dominate owner-occupant demand — contractors buying in Arlington, TX face largely the same non-QM underwriting logic, for instance, though Missouri's property tax treatment differs in ways that affect DTI calculations.

Self-employed borrowers across industries — not just construction — are increasingly turning to bank statement and freelance mortgage solutions to get around the W-2 requirement; the same lender types that serve gig workers serve contractors, and many accept a mix of 1099 and business deposit documentation.

Choose the guide below that matches your documentation situation and the property type you're buying.