Real Estate Agent Mortgage Solutions: Commission Income Qualification

Documentation Tips for Real Estate Professionals

Getting organized before you apply can dramatically speed up the process and reduce back-and-forth with underwriters. Here is what to have ready:

For conventional or 1099 mortgage applications:

Two years of personal tax returns (all schedules, all pages)
Two years of business tax returns if you operate as an LLC or S-Corp
Two years of 1099-NEC forms
Year-to-date profit and loss statement prepared or reviewed by a CPA
Current license verification from your state real estate board
Two to three months of business and personal bank statements

For bank statement loan applications:

12 to 24 months of consecutive bank statements (no gaps)
Business license and any relevant documentation of your brokerage affiliation
A CPA or tax preparer letter confirming self-employment status and business expense ratio if using business statements
Explanation letter for any large non-commission deposits

One important note on business statement programs: When using business bank statements, most lenders apply an expense factor to account for business costs, typically ranging from 10 to 50 percent depending on your industry. Real estate agents typically fall in the 10 to 25 percent expense factor range since commission income is relatively low-overhead, which means more of those deposits count toward your qualifying income.

Built-In Seasonal Income: How Lenders Evaluate Gaps

If your bank statements show several months of low deposits followed by a strong closing season, be prepared to explain the pattern. A well-prepared borrower includes a brief letter of explanation documenting the seasonal nature of real estate income in their market, paired with year-over-year comparisons showing consistency.

A good mortgage broker will help you frame your income story in a way that underwriters can follow. The income is real. The goal is presenting it clearly.

A Partnership Opportunity Worth Knowing About

Here is something not every real estate agent considers: your relationship with a mortgage broker can be more than transactional.

As an agent, you are constantly working with buyers who need financing. And your clients trust your recommendations. A lending partner who specializes in non-QM and non-conventional programs brings real value to your buyers, particularly the self-employed clients, freelancers, and investors who get turned away by big banks.

At Ultimate Mortgage, we work directly with real estate agents across Michigan, Ohio, and Indiana as referral partners. Here is what that relationship looks like in practice:

Fast pre-approvals for your buyers, so offers are credible and timely
Non-QM loan access for the clients other lenders cannot help, including investors, self-employed borrowers, and those with recent credit events
Consistent communication throughout the transaction so you are never left waiting for status updates
Your own clients benefit from working with a broker who understands commission-based income firsthand

A strong lending partnership helps you close more deals. Your clients get financing they may not find elsewhere. Everyone wins.

Frequently Asked Questions

Can a real estate agent qualify for a mortgage using only one year of commission income?

In most cases, conventional lenders require two years of commission income history. However, certain non-QM programs, including some 1099-only mortgage products, may consider borrowers with one year of self-employment history in the same industry, particularly if the prior W-2 employment was in a related field. The specific requirements vary by lender and program.

Why does my taxable income look so low even though I had a strong commission year?

Business deductions are the primary reason. Real estate agents commonly deduct vehicle mileage, marketing and advertising costs, MLS dues, professional memberships, home office expenses, and technology tools. These legitimate deductions reduce your taxable income, which is great for taxes but makes conventional mortgage qualification harder. Bank statement loan programs work around this by using gross deposits instead.

Does having a real estate license or being associated with a brokerage help my mortgage application?

It does not directly improve your income calculation, but it does serve as documentation of your self-employment legitimacy. Lenders look for evidence that your commission income is tied to an ongoing, verifiable profession. Your license status, brokerage affiliation letter, and any team production history all support the stability of your income.

How much of a down payment do I need as a 1099 real estate agent?

For conventional programs, down payment requirements are the same as any borrower, starting at 3 to 5 percent for primary residences. For non-QM bank statement loans, most programs require 10 to 20 percent down, depending on your credit score and loan amount. A larger down payment can sometimes compensate for a more complex income profile.

Can real estate agents refer their buyer clients to Ultimate Mortgage?

Yes, and we actively encourage it. We work with agents across Michigan, Ohio, and Indiana who want to connect their clients with a broker that can handle complex income situations, investment purchases, and non-conventional financing. Contact us to learn more about how a referral partnership works.

Ready to Move Forward?

Your commission income is not a liability. It just requires the right lender.

At Ultimate Mortgage, we specialize in helping Michigan, Ohio, and Indiana borrowers qualify using real-world income rather than tax-return income. Whether you are buying your first home, upgrading, or investing, we have programs designed for how real estate professionals actually earn.

Start by using our affordability calculator (/calculators/affordability) to get a baseline on your numbers. Then explore the full range of self-employed mortgage solutions (/self-employed-mortgages) we offer for commission-based and 1099 borrowers.

Or call us directly. A loan officer who understands your business can walk you through the options in a single conversation.