Earned Real Estate Commission
When buying a home, if you are also a real estate agent and you’re earning a commission from selling the home you’re buying, this commission can be used as part of your down payment and closing costs. This is what we call “earned real estate commission.” To do this, you must be a licensed real estate agent and the commission from the sale must be yours.
Documentation Requirements
The lender must verify two main things regarding your earned real estate commission. First, your commission must be clearly shown on the settlement statement, a document detailing the financial transactions involved in the sale. Second, it must be clear that your commission is being used towards your mortgage loan.
For those applying for a mortgage through Desktop Underwriter (DU), a specific online loan application process, the commission must be listed under Section 2b as a “Credit Type” of “Other.”
Recent Related Announcements
Fannie Mae keeps everyone updated on new rules or changes through announcements. The latest announcement related to using your real estate commission for buying a home was made on April 05, 2023. This announcement is referenced as Announcement SEL-2023-03.
References
For more details, visit Borrower’s Earned Real Estate Commission of the Fannie Mae Selling Guide.