By the end of this guide you will know exactly how underwriters view commission income and how to get pre-approved without a hard credit hit. Before you start, pull together two years of tax returns and any 1099s or commission statements you have on hand. Duane Buziak, NMLS #1110647, walks Glen Allen and Short Pump sales professionals through this exact process every week, whether they sell homes in Twin Hickory, cars off West Broad, or insurance policies out of an Innsbrook office.
Step 1: Gather Two Full Years of Commission Documentation
Commission income is treated differently than a fixed salary, and the paperwork reflects that. Most underwriters, following Fannie Mae guidance, ask for your most recent two years of federal tax returns, including Schedule C if you file as self-employed or the unreimbursed employee expense forms if you are a W-2 commissioned employee. Layer in year-to-date pay stubs or commission statements so the file shows continuity right up to today.
If your employer pays commission on a 1099 basis, a short signed letter from HR or your sales manager explaining how base pay, bonuses, and commission are split can shave real time off underwriting. It answers questions before an underwriter has to ask them, which matters when you are trying to close on a timeline.
The mistake I see most often among Realtors and car sales professionals in Glen Allen is assuming a big commission check counts dollar for dollar. It does not. Underwriters back out unreimbursed business expenses shown on your Schedule C or Form 2106, which can shrink your qualifying income meaningfully even in a strong earning year. Know that number before you start shopping for a house, not after you write an offer.
For the official documentation standards, the Consumer Financial Protection Bureau outlines how income and debt are weighed in a qualified mortgage, which is the foundation every broker builds on.
Step 2: Learn How Underwriters Average Fluctuating Income
Once your documents are in hand, the next question is how a lender turns two uneven years into one qualifying number. Fannie Mae’s guidelines and HUD’s FHA handbook, 4000.1, both generally call for averaging the last 24 months of commission income. If your earnings are flat or rising year over year, that average is usually straightforward: add the two years together and divide by 24 months.
If income declined from one year to the next, underwriters typically use the lower of the two years rather than the average, and a drop greater than 20% often triggers a written explanation or additional scrutiny. This is where sales professionals get nervous, especially after a slow year in a cyclical field like real estate or auto sales. It is not automatically disqualifying, but it does require a clear story: a market slowdown, a territory change, a new product line, whatever explains the dip in plain terms.
This whole exercise is what underwriters call trending income analysis, which simply means looking at the direction your income is moving, not just its average, to judge whether it is stable enough to count toward a mortgage. A pattern that trends upward strengthens your file even if the two-year average looks modest. A pattern that trends sharply downward gets flagged no matter how strong last year’s number was. Fannie Mae’s Selling Guide is the source document most brokers reference when structuring this calculation.
Step 3: Get a No-Touch Soft-Pull Pre-Approval Before You Shop
Once you understand roughly how your income will be averaged, the smart next move is a soft credit pull mortgage pre-approval, not a hard inquiry. A soft pull lets you and your broker test different scenarios, a smaller down payment against a larger one, an FHA program against conventional, without touching your credit score before you have even found a house.
Duane Buziak’s NoTouch Credit Pull process exists for exactly this reason. Commissioned sales professionals often need to run several what-if scenarios before committing to a lender, and a hard inquiry every time you want to reconsider your numbers is both unnecessary and costly to your score. The soft-pull review at this stage typically uses a Vantage Score 4.0 model, giving you a realistic picture of where you stand without any of the downside.
Once you are ready to make an offer, a formal application with a hard pull follows, but by then you already know your realistic price range, your likely rate tier, and which loan program fits your income pattern. That is the entire point of a no hard inquiry mortgage pre-approval: confidence before commitment, especially for buyers whose income does not look like a simple biweekly paycheck.
Step 4: Match Your Income Pattern to the Right Loan Program
Not every commissioned buyer fits the same loan box, and matching your income history to the right program changes both your approval odds and your rate.
- Conventional loans: These generally reward two consecutive years of stable or growing commission income with the best pricing. If your last two years trend upward and your credit is solid, this is usually the most cost-effective path.
- FHA loans: Built for buyers with thinner credit files or a shorter income history, FHA can work well for newer sales professionals who have less than two full years of commission documented, subject to standard FHA overlays and HUD’s underwriting rules.
- VA loans: For eligible veteran sales professionals, VA financing allows commission income averaging with no down payment required. Guidelines vary by broker overlay, and while the VA itself sets no official minimum credit score on va.gov, some brokers work with scores as low as 500 depending on the full file. Confirm current overlay requirements directly, since they shift by lender.
The right program often comes down to how many full tax years of commission you have filed and how your income trended over that time. A soft credit pull mortgage pre-approval is the fastest way to see which program actually pencils out for your specific numbers rather than guessing based on general rules.
Step 5: Run the Numbers on a Real Glen Allen Scenario
Suppose a Twin Hickory-area Realtor earned $70,000 in commission one year and $100,000 the next, an upward trend that qualifies for full 24-month averaging. Add those two years and divide by 24 months: $170,000 divided by 24 equals roughly $7,083 in qualifying monthly income.
Now apply that to a $450,000 purchase in the Wyndham or Twin Hickory area. At 10% down, the loan amount is $405,000. At an illustrative rate near 6.5% on a 30-year term, as of this writing (always confirm the current Freddie Mac weekly average before locking), principal and interest run approximately $2,560 a month. Add a rough $450 for taxes and insurance and total housing payment lands near $3,010, which is about 42% of that $7,083 qualifying income.
Compare that to a 5% down scenario. The loan amount rises to $427,500, pushing principal and interest to roughly $2,700 a month and total housing payment to about $3,150, or roughly 44.5% of qualifying income. That four-figure swing in down payment tightens debt-to-income by a couple of points, which can matter if you are carrying a car payment or other consumer debt alongside it.
One more detail catches commissioned buyers off guard: lenders generally will not count a partial current year of commission toward your average until a full tax year is filed and documented. If you are eight months into a great year, that income does not get folded into your average yet, no matter how strong the trend looks on paper. Plan your purchase timeline with that lag in mind.
Step 6: Compare Glen Allen Broker Options Side by Side
Not every broker in the Glen Allen and Short Pump area treats commission income the same way, and the differences matter more here than they do for a buyer with a flat salary.
- Soft-pull availability: Duane Buziak, GlenAllenMortgage.com, offers a soft credit pull mortgage pre-approval through the NoTouch Credit Pull process so you can test scenarios with no score impact. Courtney Ficken at First Home Mortgage may offer pre-qualification tools, but confirm directly whether a soft pull option is available before applying.
- Lenders shopped at once: Duane Buziak’s platform is built to shop hundreds of lenders in a single pass, which matters for commissioned buyers because pricing and income-averaging tolerance vary widely from one lender to the next. A broker working with a narrower panel of lenders may not find the program that best fits an uneven two-year income history.
- Cash-out refinance limits: Duane Buziak’s team works cash-out refinances up to 90% loan-to-value, useful for commissioned homeowners looking to tap equity between strong earning years. Ask any broker you are considering what their maximum cash-out limit actually is before assuming it matches.
- Local underwriting familiarity: Working with a broker based on Cox Rd in Glen Allen, who understands the seasonal patterns of local Realtors, car sales teams at the Short Pump dealerships, and insurance professionals around Innsbrook, tends to produce fewer surprises during underwriting than a broker unfamiliar with the local commission cycle.
Whichever broker you choose, ask directly how they document and average commission income before you sign anything. The answer tells you a lot about how smoothly your file will move through underwriting.
Step 7: Lock Your Rate and Protect Your Income Story Through Closing
Getting approved is not the finish line. Between pre-approval and closing, avoid switching pay structures, moving from a base-plus-commission role to straight commission, or changing employers entirely. Either move can restart the income-averaging clock, and an underwriter may ask you to document a fresh earnings history before they will count the new income at all.
Rate locks deserve attention too. Henrico-area rates have moved enough in recent cycles that a lock window of 30 to 60 days is common practice, but confirm today’s rate and lock terms as of your actual application date rather than relying on a number you saw last month. Your broker should walk you through lock extension costs and float-down options before you commit, especially if your closing timeline is tight around a commission-driven purchase.
Keep your commission statements current all the way through settlement. Underwriters frequently re-verify income within 10 days of closing, sometimes with a fresh call to your employer or a request for an updated pay stub. If your commission dropped sharply in that final stretch, it can affect your approval even after a clear-to-close has been issued. Staying organized with documentation from Step 1 through the closing table is the difference between a smooth settlement and a last-minute scramble.
Commission Income Mortgage Questions, Answered
How many months of commission income do I need to qualify for a mortgage? Most conventional and FHA guidelines want two full years of documented history, though FHA can work with a shorter track record in certain cases with strong compensating factors.
Does a soft credit pull mortgage pre-approval give me accurate numbers? Yes. A soft pull through a service like NoTouch Credit Pull uses your real credit data, typically scored on Vantage 4.0, so the numbers reflect your actual profile without a hard inquiry hitting your score.
How is bonus income different from commission for mortgage qualifying? Bonuses are often treated more conservatively and may require a longer documented history or employer verification confirming they are likely to continue, whereas regular commission is averaged over 24 months under standard guidelines.
What is the current conforming loan limit for a home in Glen Allen or Short Pump? As of 2026, the baseline conforming loan limit is widely cited near $832,750 for this area; confirm the exact figure on FHFA.gov since limits are set annually and can shift.
Can Duane Buziak help with both 1099 and W-2 commission income? Yes. Duane Buziak’s team documents both structures differently, using Schedule C analysis for 1099 earners and unreimbursed expense forms for W-2 commissioned employees, then structures the loan program around whichever fits best.
Will one bad year of commission disqualify me? Not automatically. If income dropped more than roughly 20% year over year, underwriters typically use the lower year and may ask for a written explanation, but a single soft year does not close the door.
Does GlenAllenMortgage.com shop more than one lender for commissioned buyers? Yes, the platform is built to shop hundreds of lenders in a single pass, which matters because lenders differ in how strictly they average variable income.
What down payment options exist for commissioned sales professionals? Options range from FHA’s low down payment programs to VA loans with no down payment for eligible veterans to conventional loans starting around 5%, each with different income-documentation tolerance.
Is a VA loan a good fit for a commissioned veteran in sales? Often, yes. VA loans allow commission income averaging and no down payment, though individual brokers apply their own credit overlays on top of VA’s baseline eligibility rules.
How does Duane Buziak calculate my qualifying income if I just started earning commission this year? Generally, lenders will not count a partial current tax year until it is fully filed and documented, so a strong current year alone will not yet move your average.
About Duane Buziak, NMLS #1110647
Duane Buziak is the Glen Allen Mortgage Broker of the Year for 2025 and was recognized as Innsbrook Business of the Year in both 2022 and 2024, alongside honors from Scotsman Guide and the Virginia Broker of the Year award. He operates through Coast2Coast Mortgage LLC, NMLS #376205, from the office at 4860 Cox Rd, Glen Allen, VA 23060, reachable at 804-212-8663.
Mortgage programs, rates, and underwriting guidelines change regularly. The figures and program details in this guide should be verified directly with Duane Buziak’s team as of your application date, since specific loan limits, rates, and overlay requirements can shift without notice.
Reach out to Duane Buziak’s team at GlenAllenMortgage.com for a soft-pull pre-approval that reflects how your commission income actually qualifies before you make an offer. Ready to experience stress-free mortgage approval with no credit hit and access to hundreds of lenders at once? Get your free mortgage consultation today and discover why Glen Allen families trust Duane Buziak for personalized guidance and the fastest close times in the area.
