Zach Templin, a TV audio technician, and his wife, Cypress Staelin, a stagehand and member of the International Alliance of Theatrical Stage Employees (IATSE), embarked on the challenging process of buying a home amid the uncertainties of gig economy income. Their journey, which culminated in the purchase of a three-bedroom apartment in Queens in February 2022, underscores the difficulties faced by independent workers seeking mortgages.

The couple began their search in 2021, amid the COVID-19 pandemic that caused widespread disruptions in the entertainment industry. Like many freelancers and content creators, they confronted significant hurdles related to nontraditional income verification, a common barrier for the estimated 42 million Americans participating in the gig economy. For many of these workers, gig income serves as a primary livelihood, yet traditional mortgage lenders and co-op boards often remain hesitant to approve financing without conventional income documentation.

Experts recommend that prospective buyers with variable income sources treat their freelance work as a business, ensuring that all earnings are properly documented on tax returns. Cody Hernandez, a real estate broker who assisted the Templin-Staelin couple, emphasized the importance of claiming the majority, if not all, of one’s income through official records to enhance approval chances.

A recent survey by Fannie Mae highlighted that while many lenders find variable income difficult to evaluate, the number of borrowers with such income is growing. To address this, various lenders and nonprofits have developed programs that consider alternative documentation, such as bank statements and 1099 forms, rather than relying solely on standard pay stubs.

Building a professional team knowledgeable about nontraditional income is also critical. Real estate lawyers, tax accountants, mortgage specialists, and brokers with experience in gig-worker financing can help navigate complex requirements and prepare comprehensive applications. Marin King, a real estate lawyer, noted that demonstrating consistent income is key, especially as co-op boards often seek clear evidence of financial stability.

In addition to organizing financial documentation, buyers are advised to maintain stable spending habits throughout the mortgage application process. Large purchases or changes in employment can negatively impact lending decisions. Lenders commonly expect prospective buyers to have a down payment of 20 to 30 percent of the purchase price, plus reserves covering one to two years of mortgage and maintenance payments.

Co-op boards present an additional layer of scrutiny. Applicants may need to provide letters of recommendation and detailed explanations of their income sources to satisfy board requirements. While discrimination based on source of income is illegal in New York City, buyers may still face challenges and should be prepared to appeal unfavorable decisions.

Mr. Templin and Ms. Staelin’s perseverance ultimately paid off. Despite an initial offer falling through, they purchased their apartment below asking price and began renovations. In January 2024, the couple welcomed their first child, realizing the goal that initially motivated their search: securing a stable home environment for their growing family. Their experience highlights both the obstacles and possibilities for gig economy workers seeking homeownership in today’s real estate market.