Overtime, Bonus and Commission Income on a Richmond Mortgage: How Conventional, FHA, VA and Virginia Housing Lenders Count It

Published October 31, 2026 | Written by the Mission Realty Team.

Lenders can count overtime, bonus and commission income, but they want proof that it is steady. The published conventional and FHA rules we could read look for one to two years of history and average the income instead of taking your best month. We could not open the VA’s own underwriting text, so this post does not state VA’s rules. Virginia Housing counts it too when it checks your income against its program limit, with its own averaging rule.

Below is the published guidance we could read, as we read it on October 29, 2026, followed by simple examples. Individual lenders can apply stricter rules than the published ones, so treat this as a guide to your conversation with a loan officer, not a prediction. If your question is about student loans instead, we already answered it in Can I Buy a House in Richmond VA With Student Loan Debt in 2026?

The four programs side by side

Conventional loans: what Fannie Mae says

Fannie Mae Selling Guide B3-3.3-02 recommends a two-year history for bonus, commission, overtime and tip income. Income received for a shorter time, but at least 12 months, may be acceptable if other positive factors reasonably offset the shorter history. For stable or increasing income, the lender averages year-to-date and prior-year earnings, dividing by the number of months those figures cover, and the calculation must include at least 12 months of income.

For example, if you earned $9,000 in overtime last year and $5,000 so far this year through August, the method works out to $14,000 over 20 months, or $700 a month. That is our arithmetic of the described method, not a lender quote. If the income is falling, the guide says the lender must confirm the current level has stabilized after the drop, or the income is not eligible. Documentation is either a completed Form 1005 verification of employment, or the most recent paystub plus two years of W-2s, along with a verbal verification of employment.

FHA loans: the lesser of two averages

The HUD Single Family Housing Policy Handbook 4000.1 says a lender may use overtime, bonus or tip income if the borrower has received it for the past two years and it is reasonably likely to continue. A period under two years may count if the lender documents that it was consistently earned for not less than one year. The lender uses the lesser of the average over the previous two years, or the shorter time it has been earned, and the average over the previous year. Commission income needs at least one year in the same or similar line of work, with the same lesser-of calculation.

Here is how that plays out in round numbers. If you earned $6,000 of overtime two years ago and $9,000 last year, the two-year average is $7,500 a year, or $625 a month, and last year’s average is $9,000. The lesser, $625 a month, is what counts. If you earned $9,000 two years ago and $6,000 last year, the two-year average is $7,500 and the previous-year average is $6,000, so $500 a month counts. A falling trend costs you. The handbook also lets a lender skip direct verification of the previous two years only when base pay alone is used to qualify, so expect more paperwork when overtime is in the mix. We read the August 2026 tracked-changes version of the handbook that HUD links from its page, which says it is for reference use only. Confirm against the official version.

VA loans: ask a lender who does them regularly

The VA guarantees home loans through private lenders, and its underwriting standards sit in Chapter 4 of the Lender’s Handbook, which the VA home loans page introduces. We could not load the handbook’s text in a form we could verify, so we are not stating its history or averaging rules. Lenders also follow their own overlays on VA loans. Ask your loan officer how many years of overtime, bonus or commission history they will want, and get the answer in writing. Our post on VA loans in Richmond covers the rest of the program.

Virginia Housing: the income limit is its own test

The Virginia Housing origination guide, revised September 2026, describes how gross annual income is calculated against the program’s household income limit. Overtime, bonuses and commissions are typically averaged over the most recent 12 months, or the past year plus year-to-date if that is unavailable. The average is multiplied by 12 and added to current base salary. They must be counted unless the employer documents that they will not continue. That is the income-limit test. The visible text we could read does not set a variable-income history rule for underwriting, so ask your lender how it underwrites it. Our posts on Virginia Housing loans for first-time buyers and the 2026 income limits cover the program.

What to gather before you apply

Pull two years of W-2s, your most recent paystub with year-to-date totals, and any employer letter that describes how your overtime, bonus or commission is earned. Do not change jobs or pay structures mid-application without asking your lender first, since each program above looks at history and continuation. If you are self-employed instead, our guide for self-employed buyers in Richmond applies, and our post on what lenders look at besides your credit score explains the debt-to-income side. Estimate payments with our mortgage calculator.

Neighborhood choice is a separate step. Start with our guides to the City of Richmond, Henrico County and Chesterfield County, then browse the property search.

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