How commission income is qualified
If commission is more than 25% of your total compensation, lenders treat you like a self-employed borrower:
1. 2-year history required at the same employer or in the same sales field 2. Qualifying income = 2-year average of gross commissions minus unreimbursed employee business expenses (reported on Schedule A, Form 2106, or Schedule C) 3. Declining income = use the lower year, not the average
Example: Year 1 gross commission $80K, Year 2 $100K, unreimbursed business expenses $10K/yr average. Qualifying = (($80K + $100K)/2) − $10K = $80K/yr → $6,667/mo.
Why write-offs hurt commission buyers
Sales pros often write off mileage, home office, meals, and travel on their taxes. Every dollar you deduct reduces your qualifying income — same tradeoff as self-employed buyers.
Common trap: A high-earning realtor writes off $30K/year in mileage. Their W-2 shows $150K, but their qualifying income after unreimbursed expenses is $120K — the underwriter subtracts the deductions.
If you're planning to buy in the next 12–24 months, moderate your business deductions on this year's return.
The documentation package
- 2 years of W-2s with commissions broken out
- 2 years of full personal tax returns (all pages, all schedules)
- YTD paystubs showing commission breakdown
- Employer VOE confirming commission structure and continuance
Some lenders offer a fast-track for salaried + <25% commission buyers who don't have to itemize unreimbursed expenses. If your base is strong and commission is a bonus, ask whether you can qualify on base alone.
Is this path right for you?
Frequently asked questions
Can I get a mortgage as a commissioned salesperson?
Yes with 2 years of history in the same role or industry. If commission is <25% of pay, less restrictive rules apply.
Do lenders subtract my business expenses from qualifying income?
Yes — unreimbursed employee business expenses from Schedule A/2106 reduce your qualifying commission income.
What if my income doubled year-over-year?
Lenders will use a 2-year average — they won't let you use only the recent higher year unless you can show sustainability.
Can I qualify on base salary and ignore commission?
Yes — if base alone supports the payment, you can leave commission out. But then you're not using it, so the file is easier to underwrite.
Related guides
- The Complete First-Time Homebuyer's Readiness Guide
- How much home you can actually afford
- Pre-approval checklist
- Back to the Knowledge Base
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