Commission based job - Conventional Loan Help

[Kendall Short]

Hi BP, A little background on what my situation is. 22 years old. Credit score 710 via credit wise. Duplex I’m looking at: 154,900 asking, 4x2 full ba. It’s been on market for 368 days and I’m guessing because one side is pretty run-down. The owners are willing to remodel the entire side once under contract. I am looking to get it down to 130,000. -Cash on hand: 13,500, should be around 17500 by December which is ideal closing time. -Some family will help with a few thousand if necessary. -Debt: $900 from my last semester at school. No Student loans, and I graduate in December. I plan on putting 10% down as it will be owner occupied. MHDC will grant me 4% of the purchase price. The numbers (including P&I, cap ex, ins., PMI, taxes, vacancy, prop mgmt): ~$1150, I don’t have my analyses paper with me but it was that +/-$50 Each side rents for $900, but since I am in a college town I would bump it to $1000, 250/rm. I’ve got a commission based job and I bring home around ~2500/mo with no debts, other than the 900 I will pay off at the end of this month. My school was paid for by athletic scholarships. A month or two after graduation, I will be heading to training to be a service manager (41-45k/year depending on monthly cash bonuses) for 19-21 weeks with all living expenses paid for by my company, so there is even more time to build up capital. ANYWAY: Are there any loopholes or things that I can do to obtain a loan even though I’ve currently got commission based job? I’ve heard of lenders taking into account a job offer letter and future rents as income, but I’d like to know what any of you have to say?

[Michael Cohen]

@Kendall Short - There is nothing wrong with a commission-based job from a lending perspective, per se. However, a conventional lender will need to average the last 24 months income to determine your qualifying monthly income. So if you've been on that job for less than 2 years, you would be ineligible for a conventional loan. 

A job offer letter is only usable when it's a w2 hourly or salary based employment, not commission based, as there is no way. Future/projected rental income can be used as qualifying income.  If you have no history of rental income (i.e. do not have 2-year history of claiming rental income on your tax returns) then lenders would use 70% of the rent as qualifying income.