This episode covers how to count commissions, bonuses, and tips when it comes to getting conventional, VA, or FHA loans.

Conventional Loans

What’s important to know is that you need to have 12 months of history receiving commission or bonus income. It should be noted that it can come from multiple employers. So, it’s okay if your bonuses or commissions come from one employer for six months and a different employer for the other six. We can combine those for conventional loans. That being said the industries need to be similar. It can’t be bonuses from selling water filters for the first six months and then bonuses you receive from haircutting for the next six.

VA Financing

VA financing requires that these commissions or bonuses have to be received for 24 months, you cannot have any job gaps, and they must come from the same employer.

FHA Financing

FHA financing is similar to conventional financing. You’ll need 12 months of receipts; however, you can’t combine two employers.

How about tip income?

So, there are a lot of people making tip income. In these cases, you will typically need two years’ worth of tip income for conventional and VA and one year for FHA.

To Summarize

Conventional Loans

• Commissions and Bonuses are treated very similarly

• Conventional loans need 12 months receipt of commission/bonus with no job gap greater than 30 days

• It’s okay if borrower changed employers within the same industry and line of work

• Conventional requires 24 months of tip income, NO GAPS receipt, and the employer needs to confirm that the tip income is expected to continue

VA Loans

• VA requires 24 months receipt on commission/bonus with no job gap greater than 30 days

• VA requires 24 months of tip income, NO GAPS receipt, and the employer needs to confirm that the tip income is expected to continue

FHA Loans

• FHA requires 12 months receipt on commission/bonus with no job gap greater than 30 days

• FHA requires 12 months of tip income, NO GAPS receipt, and the employer needs to confirm that the tip income is expected to continue

If you have any questions about this or if you have any questions you’d like us to answer on our podcast, you can email your questions to team@azmortgagebrothers.com or give us a call at (602) 535-2171. Be sure to ask us for a free quote on your next mortgage. We’ll personally work with you and help you through the whole process.

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Thanks for listening and reading the Mortgage Brothers Show. Let us know if you have any questions you’d like us to answer on this podcast. You can email your questions to Tom@AZMortgageBrothers.com or Eddie@AZMortgageBrothers.com.

Be sure to ask us for a free quote on your next mortgage. We’ll personally work with you and help you through the whole process.

Signature Home Loans LLC does not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only. You should consult your own tax, legal, and accounting advisors before engaging in any transaction. Signature Home Loans NMLS 1007154, NMLS #210917 and 1618695. Equal housing lender.

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