Mortgage Questions - Home Ready / Home Possible vs FHA

[Ada Li]

Hi there! 

1. What counts as income? Are bonuses included?
Home Ready and Home Possible have Avg Median Income limits (Philadelphia $84K)- I meet this requirement if I don't include bonuses (from referrals and performance so non-recurring) but won't if bonuses are counted.

2. Would it be less expensive for me to get an FHA loan or a Home Ready / Home Possible loan? Are there any calculators available? 
My understanding is what could potentially make the difference is the interest rate which is dependent on my credit score (which is 740+).

Any additional advice would be greatly appreciated (first time investor). Thank you in advance!

[Eric Veronica]

@Ada Li The operative word for income is "qualifying income".  If you receive other income that you do not need to qualify then it does not disqualify you from the Homepossible loan

For example....Lets say you are looking at a 2-4 unit property just south of Lexington KY and you see there is a qualifying income limit of $69,840. Let's say you have a sales job where your salary is $64,000 and you make a commission of $36,000 per year. You made $100,000 last year so you will be disqualified from the program..... Not so fast. If your lender can get your debt to income ratios to work using just your base income then you can qualify for the program.

Homepossible is a superior loan mostly because of the differences in PMI that @Dave Skow referenced. Another advantage is that a seller is usually much more likely to accept an offer with conventional financing when compared with FHA financing