Delaware presents a documentation problem that most states do not, and it comes directly from what the state is famous for.
Because Delaware’s entity law makes it the default incorporation jurisdiction in the country, an unusually large share of independent contractors here operate through an LLC or S-corp rather than as sole proprietors. That structure is good for liability and often good for taxes. It complicates a 1099 loan considerably.
The reason: if your clients issue 1099s to your entity rather than to you personally, and your entity then pays you partly on W-2 and partly through distributions, your personal 1099 total may be small or nonexistent even though the business earned well. A 1099 program reads 1099 forms. If the forms are not in your name, the program does not fit, and a bank statement or P&L program is the better tool.
So the first question in Delaware is not “which lender” — it is “whose name is on the 1099.” Establish that before you choose a product, and you will save yourself two weeks.
The Lenders
Select Home Loans
Select Home Loans is a Non-QM mortgage broker (NMLS #2384002) writing investor loans in Delaware across 1099, bank statement, P&L, and DSCR programs. Working across multiple wholesale investors matters here specifically because of the entity-structure issue above the right answer for a Delaware contractor is frequently not the 1099 program, and a lender who only writes one product will not tell you that.
Get a quote · (888) 550-3296
Other lenders worth calling — listed in no particular order:
John Thomas / Delaware Mortgage Loans (NMLS #38783) A Delaware-based originator publishing a broad Non-QM menu covering DSCR, bank statement, 1099, P&L, asset qualifier, VOE-only, ITIN, and construction programs across Delaware and Maryland. One of the more genuinely local options in a small state.
Angel Oak Mortgage Solutions Non-QM wholesale investor with a dedicated 1099 income program. Reached through a broker.
Griffin Funding Publishes qualifying on 90 to 100 percent of gross 1099 income, 620 minimum credit, and loan amounts to $4 million.
NASB (North American Savings Bank) Long-established in alternative documentation, with a 1099-NEC based program.
Deephaven Mortgage Non-QM lender with DSCR and alternative documentation programs across the Mid-Atlantic.
CrossCountry Mortgage Retail Non-QM 1099 program with published minimums around 620 FICO and 50 percent DTI.
Delaware is a small market and the local Non-QM bench is genuinely thin. Verify current licensure and program availability before relying on any listing see the disclaimer at the end of this page.
The Transfer Tax Nobody Models
Delaware’s combined state and county realty transfer tax is among the highest in the country commonly around 4 percent of purchase price, typically split between buyer and seller by contract unless negotiated otherwise. First-time buyer reductions exist but generally do not apply to investment purchases.
On a $400,000 rental that is roughly $8,000 out of your side at closing.
This does not affect your loan approval at all. It affects your returns substantially, and out-of-state investors coming from Pennsylvania or Maryland routinely underestimate it. Model it before you make an offer.
How Qualifying Works
A 1099 loan qualifies you on income documented on your 1099 forms rather than the net profit shown after deductions. Appraisal, assets, credit, reserves, and ability-to-repay all work normally.
Programs split into two camps. Some apply 90 percent or more of gross 1099 income with no expense deduction. Others apply an expense factor of 10 to 25 percent first.
On $180,000 of annual 1099 income:
| Method | Qualifying income |
| 90% of gross | $162,000/yr — $13,500/mo |
| Gross less 20% expense factor | $144,000/yr — $12,000/mo |
| Net profit from your tax return | frequently under $80,000 |
One year or two
One-year suits growing income or a recent change in client mix.
Two-year suits seasonal income which in Delaware means anyone whose business is tied to the beach season.
The two-year self-employment history requirement is a separate thing from the two-year income lookback. Ask about both.
Delaware’s Three Markets
New Castle County is the corporate and financial services market Wilmington and its suburbs, with a professional 1099 population serving the banking, corporate services, and legal sector, plus healthcare contracting. Steady long-term rental demand, closest thing Delaware has to a conventional investment market.
Kent County around Dover is government and military-adjacent, anchored by Dover Air Force Base, with lower entry prices and steadier, less spectacular rents.
Sussex County is the beach corridor Rehoboth, Dewey, Bethany, Fenwick and it operates on entirely different economics. High seasonal rents, meaningful vacancy outside season, and short-term rental licensing that is regulated town by town rather than county-wide. Each municipality sets its own rules, and some have moved to restrict or cap rentals. Verify the specific town’s ordinance, not the county’s.
Sussex properties also carry coastal wind and flood exposure that New Castle County properties do not. That belongs in your carrying-cost model.
Other Delaware Specifics
Judicial foreclosure. Delaware forecloses through the courts, which lengthens timelines and makes Non-QM investors somewhat more conservative on leverage than in a non-judicial state.
No sales tax, but that is not the tax that matters to you. Delaware’s attraction on the consumer side does not extend to real estate transactions, where the transfer tax discussed above is the relevant number.
Small market, thin comps outside the corridors. Appraisal support is solid in the Wilmington suburbs and the beach towns and thinner in rural Kent and western Sussex.
Investment Property Terms
- Down payment: 20–25 percent typical, better pricing at 25 percent and above
- Credit: 620 floor at most investors; real improvements at 680, 700, 740
- Reserves: 6–12 months PITIA, often with additional reserves per financed property already owned
- Prepayment penalties: common on investment property, typically 1–3 years, often buyable at a quarter to a half point
1099, Bank Statement, or DSCR?
Delaware is the state on this list where the three-way comparison matters most, because of the entity issue.
If your 1099s are in your personal name, the 1099 program is usually simplest and often produces the most qualifying income.
If your 1099s go to your entity, a bank statement program reading business deposits or a P&L program will generally serve you better. This is common enough here that it should be the second question a lender asks you.
If the property cash flows, DSCR sidesteps the entire question your income never enters the file. Beach properties with strong seasonal rents can clear DSCR comfortably, though a lender will want documented rental history rather than projections.
Questions to Ask
- My 1099s are issued to my LLC rather than to me personally does your 1099 program still work, or should this be a bank statement or P&L file?
- Do you qualify on gross 1099 income, or apply an expense factor?
- Will you run both the 1-year and 2-year scenarios?
- Have you closed in Sussex County recently, and how did wind and flood coverage underwrite?
- Can you quote DSCR on the same property?
- What is the prepayment penalty, and what does removing it cost?
Disclaimer
The lenders described on this page are listed in no particular order. Select Home Loans appears first because we publish this page and originate these loans; we have a commercial interest in this category. No lender listed has paid for placement.
This page reflects our opinion based on publicly available information at the time of writing. It is general information, not a recommendation, an endorsement, or an offer of credit. Lender programs, guidelines, licensure, pricing, and availability change frequently and without notice, and nothing here guarantees that any lender is currently licensed in Delaware, currently offers the program described, or will approve your file.
Consult a licensed mortgage professional and where appropriate a tax advisor, attorney, or financial advisor before making any borrowing decision. Entity structure has tax and legal consequences beyond mortgage qualification; discuss it with your CPA and attorney. Transfer tax treatment, short-term rental ordinances, and insurance availability vary and should be verified independently. Verify any lender’s licensure through NMLS Consumer Access at nmlsconsumeraccess.org.
Select Home Loans, NMLS #2384002. Equal Housing Opportunity.
