Webb County

Laredo Mortgage Broker: Self-Employed and 1099 Home Loans

Laredo is the largest inland port in the United States. More trade crosses here than at any other land border crossing in the country, and the economy built around it — customs brokerage, freight forwarding, warehousing, owner-operator trucking, logistics consulting — runs heavily on 1099 income and small business ownership.

That produces a specific mortgage problem, and it is the opposite of the one most people expect. The issue is rarely that borrowers here do not earn enough. It is that the tax return does not show it.

Why a good year on paper still fails underwriting

When you are self-employed, lenders do not qualify you on revenue or on deposits. They qualify you on net income after expenses, taken from your filed returns and averaged, usually over two years.

Every legitimate write-off that lowers your tax bill lowers your qualifying income by the same dollar. A broker netting $180,000 before deductions who writes down to $70,000 taxable is a $70,000 borrower to a conventional underwriter.

Some of it comes back. Underwriters add certain non-cash items to net income:

• Depreciation — a paper expense, added back
• Depletion — added back
• Amortization of intangibles — added back
• Business use of home, in most cases
• One-time, documented non-recurring losses, with a credible explanation

What does not come back: vehicle expenses beyond the depreciation component, meals, travel, supplies, contract labor — the ordinary cash costs of running the business.

Two structural rules that catch people:

A declining trend is a problem. If year two is meaningfully below year one, many underwriters will use the lower figure or decline to average. Buying in the year after a slow year is materially harder than buying after a strong one.

Partnership and S-corporation income needs the business returns too. K-1 income generally requires the entity's return, and distributions must be supportable by business liquidity. A K-1 alone is rarely sufficient.

Bank statement loans, and who they actually fit

When the returns will not support the purchase, the answer is usually a bank statement program — which qualifies on deposits rather than on taxable income.

How they work in practice:

• 12 or 24 months of statements, personal or business
• The lender totals qualifying deposits and applies an expense factor — commonly 50% on business accounts, sometimes lower with a CPA letter or a profit and loss statement supporting a different ratio
• No tax returns, no K-1s, no add-back analysis
• Typically larger down payments than conventional, and pricing above agency

Who this is right for: the borrower whose business genuinely produces the cash flow but whose returns are aggressively — and legally — optimized. A customs broker, a freight agent, an owner-operator with a couple of trucks, a restaurant owner.

Who it is wrong for: someone whose deposits are thin because the business genuinely is. A bank statement program does not manufacture income; it reads it from a different document.

What to prepare: clean separation between business and personal accounts, and an explanation for any large non-revenue deposits. Transfers between your own accounts, a loan from a relative, or the sale of equipment all look like revenue to a statement analysis and all have to be identified and excluded. Commingled accounts are the single most common reason these files stall. Full detail on bank statement loans.

Owner-operators and the trucking question

Laredo has an unusually high concentration of independent truckers, and their files have a pattern worth naming.

A 1099 owner-operator is self-employed, even when driving for a single carrier. The returns govern, with Schedule C net income after the vehicle write-offs that make this business tax-efficient — which is why owner-operators are among the most common bank statement borrowers here.

Depreciation on the tractor is an add-back, and it is frequently large. On an aggressively depreciated truck, the add-back alone can move a file from declined to approved. Make sure whoever reviews your return actually performs the add-back analysis rather than reading the bottom line.

Fuel, maintenance and insurance do not come back. They are real cash costs.

A W-2 company driver is not self-employed and qualifies on pay stubs like any other wage earner. If you switched from company driver to owner-operator recently, that transition resets your self-employment history clock, and most programs want two years — though some will accept one year with a strong prior history in the same line of work.

USDA, which covers a lot of Webb County

Webb County is large and mostly rural, and a substantial share of it outside Laredo's city limits sits in USDA-eligible territory.

USDA financing offers no down payment on eligible properties for borrowers within household income limits, and the guarantee fee structure is generally cheaper over time than FHA mortgage insurance.

Two things to verify, both by address rather than by assumption: property eligibility, which is mapped and does change as areas are re-designated, and household income eligibility, which counts the income of all adult household members rather than just the borrowers.

For self-employed borrowers, USDA uses tax return income the same way conventional does — so the add-back analysis above matters just as much here.

Webb County taxes and insurance

Combined rates in Laredo generally run in the 2.4% to 2.9% range — City of Laredo, Webb County, Laredo College, and your school district, which is most often Laredo ISD or United ISD. The two districts split the city and carry different rates.

Verify the parcel with the Webb County Appraisal District. A sale resets appraised value and the seller's exemptions end at closing. File your homestead exemption the year you buy.

On insurance: Laredo is far enough inland to sit outside the Texas windstorm pool that governs the coast, so coverage here is written in the ordinary market. Hail is a real Panhandle-and-Plains issue rather than a South Texas one. What does matter locally is that older stucco and masonry construction is sometimes rated differently, and that roof age drives premium here as everywhere.

Where people buy

North Laredo along McPherson and Del Mar holds most of the newer single-family development and the higher end of the market.

The Heights and the neighborhoods near Texas A&M International University carry 1970s through 1990s stock.

San Isidro on the northeast side is among the newest master-planned development in the city.

Central and south Laredo near San Agustín Plaza and the original townsite hold the oldest housing, including genuinely historic masonry construction.

Outside the city limits along the Mines Road and US-83 corridors, lots get larger, properties move onto well and septic, and USDA eligibility becomes likely.

The city

Laredo was founded in 1755 as Villa de San Agustín de Laredo, and it is the only Texas city that has flown seven flags — including that of the short-lived Republic of the Rio Grande, which briefly claimed independence from Mexico in 1840 and used a building on San Agustín Plaza as its capitol. That building is now a museum.

San Agustín Plaza remains the historic center of the city, anchored by the San Agustín Cathedral.

Fort McIntosh, established in 1849, now houses Laredo College on its original grounds, with a number of nineteenth-century military buildings still standing.

The Washington's Birthday Celebration has run since 1898 and is among the largest celebrations of its kind in the country, lasting most of February.

Lake Casa Blanca International State Park on the east side handles most of the outdoor recreation, and the Rio Grande itself runs the length of the city's western edge.

Not sure which fits? Compare every loan program we place.

Frequently asked questions

Why do I not qualify for more when my business does well? Because lenders qualify self-employed borrowers on net income after expenses from filed tax returns, not on revenue. Every deduction that lowers your tax bill lowers your qualifying income by the same amount.

What expenses get added back to my income? Depreciation, depletion, amortization of intangibles, business use of home in most cases, and documented one-time losses. Ordinary cash costs — fuel, meals, travel, supplies, contract labor — do not come back.

What is a bank statement loan? A program that qualifies you on deposits over 12 or 24 months instead of tax returns, applying an expense factor to arrive at usable income. Larger down payments and pricing above agency, but it reads the income your returns understate.

Can an owner-operator truck driver get a mortgage? Yes. A 1099 owner-operator is self-employed and qualifies on Schedule C net income with depreciation added back — which is often substantial on a tractor. Where the returns still fall short, a bank statement program usually works.

Do I need two years of self-employment? Most programs want two years. Some will accept one year where you have a documented prior history in the same field, which matters if you recently moved from company driver to owner-operator.

Is Webb County eligible for USDA loans? Much of the county outside Laredo's city limits is. Both property location and household income must be verified by address, and eligibility maps are periodically redrawn.

What are property taxes in Laredo, TX? Combined rates generally run about 2.4% to 2.9%, varying between Laredo ISD and United ISD. Verify the parcel with the Webb County Appraisal District.

Send us two years of returns before you shop

For a self-employed borrower, the pre-approval is the whole game, and it cannot be done from a conversation about what you make.

Send the returns. We will run the add-backs, tell you what a conventional underwriter will see, and tell you whether a bank statement program gets you materially further.

Start your application · Run the numbers · Call 737-347-1314

Nearby Areas

Nearby & Related