Make 8-10k/ month but can't quality for FHA

2 Replies

I work as a Dental Hygienist in NY. Have been working all through school and landed my career job a year ago. First 6 months was paid hourly, since Jan 2018 have been on straight commission pay. Have tried multiple banks and lenders but nobody will approve me for a loan. I have great credit, barely any debt, make 8-10k per month. How do I get an FHA owner occupied 4 unit without waiting 2 years or putting 20% down?

You only have to get to the 1 year point on commissions. So you have 6 more months to go. I would plan on getting everything done in advance and once you hit the 1 year mark, be ready to close immediately thereafter. Here are the actual FHA guidelines regarding this. I tried to add the image but it didnt let me, so I copied and pasted the text below:

The Mortgagee may use Commission Income as Effective Income if the Borrower

earned the income for at least one year in the same or similar line of work and it is

reasonably likely to continue.

The Mortgagee must calculate Effective Income for commission by using the lesser

of (a) the average net Commission Income earned over the previous two years, or the

length of time Commission Income has been earned if less than two years; or (b) the

average net Commission Income earned over the previous one year. The Mortgagee

must calculate net Commission Income by subtracting the unreimbursed business

expenses from the gross Commission Income.

The Mortgagee must reduce the Effective Income by the amount of any unreimbursed

employee business expenses, as shown on the Borrower’s Schedule A. For

information on analyzing the Borrower’s 1040, review Analyzing IRS Forms.