A Fannie Mae applicant has 14 months of commission income, positive factors supporting the shorter history, and stable or increasing documented earnings. Under the March 2026 guide, must the income be rejected solely because it is short of two years?
Correct Answer
A) No: at least 12 months can be acceptable with positive offsetting factors and the required analysis
A. Fourteen months is not automatically disqualifying under the stated Fannie Mae policy. The guide recommends two years but permits consideration of at least 12 months with positive factors offsetting the shorter history. For stable or increasing earnings, the qualifying average uses documented year-to-date and prior-year earnings over the represented months, including at least 12 months. Scope and exceptions: Meeting the history threshold alone does not qualify the loan. Documentation, payment frequency and trend still matter. A declining trend requires confirmation of stabilization and a different calculation; these rules are program-specific, not universal commission-income law. Source: March 4, 2026: Income History and Determination of Qualifying Income — https://selling-guide.fanniemae.com/sel/b3-3.3-02/bonus-commission-overtime-and-tip-income
Why This Is the Correct Answer
A. Fourteen months is not automatically disqualifying under the stated Fannie Mae policy. The guide recommends two years but permits consideration of at least 12 months with positive factors offsetting the shorter history. For stable or increasing earnings, the qualifying average uses documented year-to-date and prior-year earnings over the represented months, including at least 12 months. Scope and exceptions: Meeting the history threshold alone does not qualify the loan. Documentation, payment frequency and trend still matter. A declining trend requires confirmation of stabilization and a different calculation; these rules are program-specific, not universal commission-income law.
Why the Other Options Are Wrong
Option B: Yes: 24 months is an absolute minimum without exceptions
It turns a recommended history into an absolute minimum.
Option C: No: six months alone is sufficient regardless of offsetting factors
Six months fails the stated shorter-history minimum.
Option D: Yes: commission income requires five complete tax years
The cited guide does not impose this five-tax-year rule.
Exam Tip
Distinguish recommended history, minimum acceptable history and the qualifying-income calculation.
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