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Verification of Commission Income

A minimum history of 2 years of commission income is recommended; however, commission income that has been received for 12 to 24 months may be considered as acceptable income, as long as there are positive factors to reasonably offset the shorter income history.

If the commission income represents less than 25% of the borrower's total annual employment income, obtain the following documents:

• a completed Request for Verification of Employment (Form 1005 or[ Form 1005(S)

• ), or
• the borrower's recent paystub and IRS W-2 forms covering the most recent two-year period.

If commission income represents 25% or more of the borrower's total annual employment income, obtain the following documents:

• copies of the borrower's signed federal income tax returns that were filed with the IRS for the past two years; and either
  
  • a completed Form 1005 or Form 1005(S), or
  • the borrower's recent paystub and IRS W-2 forms covering the most recent two-year pe- riod.

For borrowers with commission income representing 25% or more of their total annual employment income, any unreimbursed business expenses must be subtracted from the gross commission income.

A verbal VOE is required from each employer. See B3-3.1-07, Verbal Verification of Employment (10/ 02/2018), for specific requirements.

See B3-3.1-01, General Income Information (08/07/2018), for additional information about calculating variable income.

See B3-3.1-02, Standards for Employment Documentation (10/24/2016), for additional information about verifying employment income.