Overtime, bonus, commission & tip income
Variable earnings can qualify even when they are not identical every month. The lender has to establish enough history to calculate a stable amount.
Fannie history
Fannie recommends a two-year history for bonus, commission, overtime and tips, but may accept a shorter period when the income has been received for at least 12 months and positive factors reasonably offset the shorter history.
Trend matters
Averaging is not permission to ignore a decline. Lenders need to assess whether variable income is stable and whether the amount used is supported by the current trend.
Freddie
Freddie treats bonus, commission, overtime and tips as additional fluctuating employment earnings and evaluates historical earnings and stability. Current Freddie guidance says qualifying income must be likely to continue for at least the next three years, although documentation of continuance is generally not required when there is no information indicating the income will stop.
Official guide baseline
Fannie Mae Selling Guide · Freddie Mac Seller/Servicer Guide
Agency guide and AUS findings control over summaries. Lender overlays may be more restrictive.