Mortgage  Question?
Use Income From Flipping Homes to Qualify for Mortgage?

Can you use income from flipping homes to qualify for a mortgage? I flipped a couple of homes last year and want to understand if that income helps me get a mortgage.

Harry Jensen
, Trusted Mortgage Expert with 45+ Years of Experience
Edited by Michael Jensen

To use income from flipping homes to qualify for a mortgage you are required to demonstrate a multi-year track record of successfully earning the income.  Specifically, your tax returns, bank statements or other financial records must show that you generate steady profits from flipping homes.

If you have only flipped homes a couple of times and it is not your primary source of income, then lenders do not consider the income to be permanent or sustainable and likely discount or exclude it altogether when you apply for a mortgage. In this case the income may provide an extra nudge for your application but you need to qualify for the loan using other sources of income such as from a full-time job.

On the other hand, if you have earned a consistent level of income over several years and flipping homes is your primary job, then you should be able to use the income to qualify for a mortgage, assuming you can document the income. 

The process of applying for a mortgage in this situation is similar to if you are self-employed.  You are usually required to show a two year history of earning income, as evidenced by your personal or business tax returns, for the lender to include the income in your loan application.  Additionally, in some cases can be helpful if you establish a separate business entity such as an LLC through which you flip homes as providing a business profit and loss (P&L) statement prepared by a CPA can bolster your application. 

To determine the loan you can afford, lenders typically calculate your average monthly income from flipping homes over the prior two years.  So if your income increased significantly over the past year, the lender may not give you full credit for your higher current income figure because your monthly average for the past two years is lower.

Use ourMORTGAGE QUALIFICATION CALCULATORto determine the loan you can afford based on your income and debt expense

Please note that significant swings in your income can also create an issue with your application.  From the lender's perspective, the more stable your income and the longer you have flipped homes, the better.  In short, lenders are required to confirm that you can afford your monthly mortgage payment and fluctuations in your income can make this challenging.

Finally, if a lender tells you that you cannot use income from flipping homes to qualify for a mortgage that does not mean that those funds cannot help you buy a home.  For example, you can use the proceeds from selling a home that you flipped to pay for your down payment or closing costs or to meet a reserve requirement.  In this case, you need to qualify for the loan using other income sources but the money you earn from flipping homes is still beneficial. 

The table below shows mortgage rates and fees for leading lenders in your area.  We recommend that you contact multiple lenders to confirm their qualification guidelines based on your personal situation.  Shopping lenders also enables you to find the best loan terms.

Current Mortgage Rates in Ashburn, Virginia as of May 18, 2024
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Rate data provided by Displayed by ICB, a division of Mortgage Research Center, NMLS #1907, Equal Housing Opportunity. Payments do not include taxes, insurance premiums or private mortgage insurance if applicable. Actual payments will be greater with taxes and insurance included. Read through our lender table disclaimer for more information on rates and product details.


"B3-3.1-01, General Income Information."  Selling Guide: Fannie Mae Single Family.  Fannie Mae, August 7 2019.  Web.

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About the author
Harry Jensen, Mortgage Expert

Harry is the co-founder of FREEandCLEAR. He is a mortgage expert with over 45 years of industry experience. Over his career, Harry has closed thousands of loans for satisfied borrowers and now offers his advice and insights on FREEandCLEAR.  Harry is a licensed mortgage professional (NMLS #236752). More about Harry

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