Can I use overtime, bonus, commission, or part-time income for FHA?
Often yes, with a documented two-year history and likelihood-to-continue. Overtime, bonus, commission, and part-time income are typically averaged over the most recent two years (sometimes 24 months of pay stubs plus W-2s). Year-to-date trend and any decline get scrutinized. Lender overlays vary on how much to count.
What this actually means.
FHA accepts variable income when it's stable and documentable. Standard documentation: two years of W-2s showing the income, current pay stubs reflecting year-to-date, and a verification of employment confirming the income type and continuance. Declining year-over-year trends usually mean the lender uses the lower number, not the average. Bonus income paid annually needs two full years of bonus history. Commission-only income gets the strictest treatment — the lender often nets out unreimbursed business expenses. Part-time income at the same employer with a stable history is commonly accepted; new part-time at a second job has a tougher path. Subject to FHA/HUD guidelines and lender overlays.
What this looks like on a real file.
Where this can move.
Income type, employment history, debt ratio, reserves, automated underwriting findings, and lender overlays can change the answer.
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Educational only. FHA guidelines, lender overlays, rates, fees, and underwriting requirements can change. Final eligibility depends on full underwriting review. Mortgage Expert, Inc. is not affiliated with HUD, FHA, or any government agency.