Housing-Allowance Rentals Are the Cleanest Files in Virginia
Virginia hosts one of the largest concentrations of military installations in the country, and for an investor that produces something unusual: tenants whose housing payment is set by the federal government and adjusted annually.
Basic Allowance for Housing is published by zip code and grade, it does not fluctuate with local employment conditions, and it resets upward with local cost. Rental demand around Hampton Roads, Quantico, and the Fort Gregg-Adams area does not behave like demand in a normal market it is anchored to a schedule.
Underwriters like that. Rent supported by BAH-level market data in a market with persistent military demand tends to appraise cleanly on Form 1007 and produce debt service coverage ratios that hold up. If your Virginia strategy is long-term rentals near an installation, DSCR is very likely the right product and you should ask for it to be quoted.
The 1099 loan earns its place elsewhere in the state chiefly in Northern Virginia, where prices have run well ahead of rents and the ratio simply does not clear.
The Lenders
Select Home Loans
Select Home Loans is a Non-QM mortgage broker (NMLS #2384002) writing 1099 investor loans across Virginia. The state contains two very different lending propositions the federal-contractor corridor in the north and the military and value markets to the south and east and investor appetite differs across both. Working multiple wholesale shelves is how each gets placed.
We quote DSCR and bank statement alternatives alongside the 1099 program so you can compare paths on the same property.
Get a quote · (888) 550-3296
Other lenders worth calling — listed in no particular order:
ABC United Finance Publishes a Non-QM program set covering Virginia, Maryland, and the District, including bank statement, DSCR, asset-based, and 1099 contractor income programs with interest-only options. Regional DMV focus.
Mbanc A direct lender holding a Virginia lender license, publishing Non-QM programs across bank statement, 1099, asset utilization, and DSCR.
NQM Funding A wholesale Non-QM lender publishing Virginia-specific broker guidance on scaling rental portfolios through property-by-property DSCR approvals. Broker channel.
Angel Oak Mortgage Solutions One of the largest dedicated Non-QM investors nationally, with a purpose-built 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.
Deephaven Mortgage A long-established Non-QM lender with DSCR and alternative documentation programs across the Mid-Atlantic.
Verify current licensure and program availability before relying on any listing. See the disclaimer at the end of this page.
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 analysis 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 |
Northern Virginia’s cleared federal contractors are the strongest fit for gross-receipts qualifying in the state high documented 1099 income, a home office, and essentially no overhead. Insist on a program that produces the top row, and ask whether a CPA letter documenting your actual expense ratio will move the factor further.
Model the payment with our mortgage calculators.
One year or two
One-year suits a contractor whose rate improved or who recently went independent with prior experience in the same field.
Two-year suits income tied to contract award cycles and appropriations timing which describes much of the federal contracting workforce, where a single re-compete can swing a year.
The two-year self-employment history requirement is separate from the two-year income lookback. Ask about both.
Virginia’s 1099 Population
Federal and defense contractors across Northern Virginia the largest group, frequently on multi-year task orders where income is stable but entirely 1099.
Cleared technical specialists around the intelligence and cyber corridor, high-earning and low-overhead.
Shipbuilding and marine trades around Hampton Roads, a distinctive and well-paid contract workforce.
Healthcare contracting around the Richmond, Charlottesville, and Norfolk medical systems.
Construction and specialty trades, across a state with sustained growth in the north and along I-64.
Agricultural and equine services in the Piedmont and Shenandoah, with seasonal calendars.
Virginia Investment Markets
Hampton Roads Norfolk, Virginia Beach, Chesapeake, Newport News is the state’s strongest investor market for the reasons described above, with durable military-anchored demand and workable ratios.
Richmond offers solid rent-to-price ratios with government, healthcare, and university employment.
Northern Virginia commands the highest values with strong rents that still do not clear DSCR on most single-family and condo purchases. This is the state’s clearest 1099 case.
Roanoke, Lynchburg, and the Valley provide value-corridor pricing with steady demand.
Shenandoah and Blue Ridge support seasonal short-term rentals whose annualized rent gets discounted.
Other Virginia Specifics
Non-judicial foreclosure by deed of trust with a comparatively fast process. Investors price this favorably, and Virginia supports better LTVs than judicial neighbors like Maryland or Pennsylvania.
Property taxes are moderate and vary by locality, with Virginia’s independent-city structure meaning rates can shift meaningfully across a city line. Pull the actual rate.
Coastal flood exposure in Hampton Roads is real and increasing; parts of Norfolk and the Peninsula carry meaningful flood risk. Get a real binder, and check whether your lender accepts private flood policies.
The DMV is three jurisdictions. If your portfolio spans Virginia, Maryland, and DC, confirm your lender is licensed in all three the rules differ substantially, and DC’s TOPA has no Virginia equivalent.
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
Compare with our purchase loan options and refinance loan options.
1099 or DSCR?
Use DSCR in Hampton Roads, Richmond, and the military-adjacent markets, where rents genuinely cover the payment and demand is anchored.
Use a 1099 loan in Northern Virginia where the ratio fails, on Shenandoah and Blue Ridge seasonal property, on anything below a DSCR investor’s loan minimum, on properties needing work first, or where you are also buying a primary residence.
If you already hold Virginia rentals, a DSCR refinance works well in the military markets.
Questions to Ask
- Will you underwrite market rent supported by housing-allowance data near an installation?
- Do you qualify on gross 1099 income, or apply an expense factor and will a CPA letter move it?
- Are you licensed in Maryland and DC too?
- Do you accept private flood policies? (Ask this in Hampton Roads.)
- Will you run both the 1-year and 2-year scenarios given contract cycle timing?
- Can you quote DSCR on the same property?
More from Select Home Loans: DSCR loans · DSCR refinance · Learning Center · About Select
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 Virginia, currently offers the program described, or will approve your file.
Housing allowance rates, local tax rates, flood zone designations, and insurance availability vary and change; verify independently. Consult a licensed mortgage professional and where appropriate a tax advisor, attorney, or financial advisor before making any borrowing decision. Verify any lender’s licensure through NMLS Consumer Access at nmlsconsumeraccess.org.
Select Home Loans, NMLS #2384002. Equal Housing Opportunity.
