North Carolina Stated Income Alternatives for Commission-Based Borrowers: Safer Non-QM Paths Than “No Doc”

An operating guide for mortgage brokers and loan officers serving North Carolina’s commission-heavy earners with compliant Non QM options

Search intent and audience

This article is written for mortgage brokers and loan officers who structure Non QM mortgages for North Carolina borrowers with large or variable commission income. It shows how to replace outdated stated or no documentation ideas with safer, Ability to Repay based alternatives that still respect the rhythm of commission checks, bonuses, and recoverable draws. Throughout, position NQM Funding as a trusted Non QM Lender and move prospects into a clean intake path through Get a Non-QM quick quote.

From legacy “stated” to today’s safer alternatives

Before current rules, stated or no documentation loans allowed borrowers to declare income without evidence. That approach created speed at the cost of reliability. Modern Non QM programs operate inside Ability to Repay logic. The key difference is that documentation is flexible but still verifiable. You can use bank statements, CPA prepared profit and loss statements, or asset based methods to demonstrate capacity. For commission based earners, the goal is to show a repeatable income pattern tied to actual cash flow rather than forcing a perfect two year W 2 or tax return story that often penalizes legitimate write offs, chargebacks, and seasonality.

Who benefits in North Carolina’s commission economy

North Carolina has clusters of commission heavy roles. Charlotte based financial services and logistics teams often pay significant portions of comp as quarterly bonuses, incentive pay, and trailing commissions. Raleigh Durham has enterprise software sales, life sciences account executives, and medical device representatives who see income spikes around quarter ends and product launches. The Triad mixes furniture, advanced manufacturing, and distribution sales that ramp with trade shows and retail seasons. Wilmington and the Crystal Coast create hospitality and marine sales cycles that peak in spring and summer. Asheville blends outdoor, wellness, and specialty retail sales with strong tourist seasonality. Fayetteville and the Sandhills pair real estate and housing related commissions with military move cycles. These local patterns influence how you select a bank statement window, how you explain chargebacks and spiffs, and how you structure payments so clients can carry the note during slower months.

Bank statement mortgages for commission volatility

Bank statement underwriting converts documented deposits into qualifying income. You choose a window that best represents the borrower’s current earning power. Short windows such as two or three months are helpful when a sales professional has recently moved to a stronger territory or returned to a normal cadence after a temporary dip. Twelve or twenty four month windows smooth heavy quarter end spikes, draw reconciliations, and product launch bumps. For sales teams with spiffs, accelerators, or clawbacks, you will earn credibility by identifying which deposits are true earnings versus recoverable advances. Your memo should explain how draws net out against future commissions, and how chargebacks on returned merchandise are shown in the statements.

When deposits hit both a business operating account and a personal account, map the flow. Label account roles such as business operating, payroll, tax, and personal sweep. Remove transfers between owned accounts, owner contributions, credit line draws, and refunds that are not revenue. An underwriter can replicate your math in minutes when you highlight counted deposits and strike out excluded ones on the PDFs. Teach clients that deposit clarity wins better pricing because it removes guesswork for the reviewer. Direct prospects to the Bank statement mortgage page so expectations around deposit driven income are clear from the first call.

P and L supported alternatives with accountant validation

Some commission earners pair a lean salary or draw with irregular but material commission spikes. A simple, accountant prepared profit and loss statement can help align deposits with expense reality. The P and L does not replace bank statements. It explains them. It can show seasonality, recurring overhead for a self employed sales rep, and one time adjustments such as a territory realignment or a product changeover that temporarily shifted close dates. When a P and L is used, add a brief CPA letter that describes the business, confirms that the P and L is prepared from underlying records, and lists ownership percentage when the borrower operates through an entity. This combination makes the expense factor applied to deposits easier to accept.

1099 income nuances for independent contractors

Independent contractors often sell on multiple platforms or for multiple brands. They may receive payouts from payroll companies, affiliate portals, marketplace gateways, and direct wires from manufacturers. Your intake should capture every revenue channel and which account receives it. If the platform nets fees before payout, avoid double counting by using the net deposit shown in the bank statement, not the gross on the platform dashboard. If chargebacks are common, show how they appear on statements and over what time period they are reconciled. When the borrower receives a monthly draw that reconciles quarterly, document the schedule and provide two quarters of statements so the pattern is visible. Underwriters respond to predictable patterns even when the absolute amounts are variable.

Asset depletion and asset utilization options that steady capacity

When liquid assets are strong, an asset based method can supplement deposit volatility. An asset depletion calculation converts eligible balances into a conservative income stream based on an assumed draw period. Retirement accounts can count using discounted access assumptions if program rules allow. Brokers should present a simple reserve map that separates funds to close from post closing reserves, and converts the remainder into months of principal, interest, taxes, insurance, and association dues. Asset depth calms pricing when leverage is high or when the commission track record is shorter due to a recent role change.

Hybrid structures that protect execution

Commission volatility encourages flexibility in structure. A borrower may qualify through bank statements and then add a light asset utilization component to thicken income. Another file may use a longer bank statement window rather than stretching leverage. For dual earners, consider whether the co borrower’s stable W 2 income can carry the payment in slow quarters, while the commission earner provides the reserves and down payment. The right mix is the one that creates a clean narrative without stacking too many risks. Your memo should name the risks and the compensating factors plainly. Loan teams move faster when they see that you selected a path that matches the income story rather than pushing maximum leverage and hoping for exceptions.

Rates, structures, and payment management for sales cycles

Payment shape matters for commission earners. An interest only period, if eligible, can align with irregular cash flow and allow targeted principal curtailments after bonus months. Hybrid adjustable rate structures can reduce early payments and provide flexibility to refinance when rates or compensation normalize. Fixed terms can serve clients who value certainty more than the lowest initial payment. Whatever the note, model the all in payment with taxes, insurance, and any association dues. Show month one payment, a reasonable refinance checkpoint, and the reserve cushion in months of PITIA. The plan written in plain language prevents lock stress later because expectations and timelines are visible from the start.

Risk layering and compensating factors that keep pricing steady

Non QM programs are built to absorb complexity, but they still reward moderation. If loan to value is high, strengthen reserves. If credit is thin due to a recent life event, avoid additional risks like short seasoning or aggressive interest only terms. If deposit volatility is large, widen the bank statement window or include the accountant letter and a clear pipeline explanation. For commission borrowers who changed employers within twelve months, provide offer letters, compensation plans, and production reports that show early traction. The fewer surprises the underwriter sees, the more likely your price holds through conditions.

Documentation checklist that clears conditions on the first pass

Start with full PDF statements for the selected months, including all pages. Include a page that shows the account holder name and last four digits. Provide platform or employer reports that decode payout descriptors on statements. If an entity is involved, include formation documents, operating agreements, and a simple org chart. Add the P and L if used, the CPA letter, and any commission plan or draw policy that affects timing. Provide a one page income summary that totals counted deposits, lists exclusions, shows any expense factor or P and L tie out, and gives the final monthly qualifying income. Move clients into Get a Non-QM quick quote early so documents arrive in the correct order and format.

Compliance and Ability to Repay logic without tax returns

The absence of tax returns in the qualifying method does not remove the duty to underwrite carefully. Sourced and seasoned funds are still required. Large transfers should be explained. Names and entity styles must match across applications, bank statements, and business records. If reserves rely on business accounts, include a preparer note that the borrower can access funds without impairing operations. When the borrower uses multiple accounts, create a short source map that shows where revenue lands first and where it moves next. This level of clarity speeds review and reduces conditions.

North Carolina location notes for local SEO

Charlotte and Mecklenburg County. Financial services and logistics sales roles dominate. Many employers use quarterly bonuses and year end true up programs. When a borrower has a trailing payment plan, expand the bank statement window to capture at least one full cycle and add the compensation plan to your memo. Property taxes vary by municipality, and some condo buildings carry material association dues. Model both accurately against the unit type and building budget.

Raleigh Durham and the Triangle. Enterprise software, biotech, and health care drives commission profiles with large quarter end spikes. When a rep changes products or territories, show the training ramp and early pipeline metrics. Present a reserve map that covers a slow quarter and a clear refinance or curtailment checkpoint. Townhome and condo projects near RTP often have strong budgets and amenities. Provide the condo questionnaire contact at intake to avoid delays.

Greensboro, Winston Salem, and High Point. Manufacturing and furniture sales align to trade events and retail cycles. Chargebacks on returns can be significant. Call these out in your deposit analysis and avoid counting advances that will reverse. Older housing stock in the Triad can create higher maintenance and insurance. Include realistic expense estimates when modeling the all in payment so coverage and cushion are believable.
Wilmington, New Hanover, and the Crystal Coast. Hospitality, marine, and vacation related sales follow seasonal patterns. Show that reserves can carry the note through the off season. Many coastal properties require wind and flood coverage with larger deductibles. Include declarations and deductibles in the payment model. Association dues can also be significant in newer waterfront buildings; add those early so pricing does not change after disclosure.

Asheville and Buncombe County. Outdoor, wellness, and specialty retail commissions respond to tourism and events. For properties in mountain communities, verify private road maintenance agreements and HOA coverage items such as snow removal. Demonstrate that the borrower’s slow season cash position is adequate to carry PITIA plus variable utilities.

Fayetteville, Cumberland, and Sandhills. Military move cycles drive real estate and related sales commissions. If a borrower’s pipeline is tied to PCS season, show historical production by season and emphasize reserves that span slower quarters. For homes near bases, verify insurance considerations such as wind or special endorsements.

Outer Banks and coastal counties. Vacation oriented sales have strong spring and summer and a lean winter. Apply longer bank statement windows and clear reserve strategies. Verify flood zones, elevation certificates, and association budgets in smaller HOAs.

Investor angle for commission earners: when DSCR beats personal income

Some commission heavy clients prefer to keep personal income outside the approval and qualify an investment purchase on the property’s own cash flow. A DSCR program may be the better lane when market rent supports the note. The appraiser’s market rent schedule and realistic expense inputs determine coverage. If the unit is in a condo building, add association dues and any special assessments to PITIA. For short term rental oriented beach towns, confirm local ordinance limits and seasonality assumptions. Use the Investor DSCR loan page to set expectations and keep the decision property driven. This approach is often helpful when the borrower is ramping in a new role but wants to acquire now.

Underwriting walk through that turns deposits into income

Consider a sales account executive in Raleigh who moved to a new territory nine months ago. The borrower receives a modest base and variable commissions with accelerators for new logos. Deposits over the last twelve months average twenty one thousand eight hundred dollars per month after removing transfers and one time sign on incentives. Chargebacks average six hundred dollars per month and appear as negative adjustments in the month following returns. A reasonable expense factor is applied based on the borrower’s business overhead and a brief CPA letter. The resulting qualifying income is twelve thousand nine hundred dollars per month. The target home carries a payment including taxes, insurance, and HOA of five thousand three hundred dollars. The borrower holds reserves equal to ten months of PITIA after closing, partly in brokerage accounts and partly in business savings with a preparer note confirming access. The narrative in your memo says the income is reproducible, the reserves can carry a slow quarter, and the structure fits the sales cycle. That is what credit teams want to read.

Appraisal, condos, and HOA realities in North Carolina

New construction townhomes and condos have different budget maturities than older associations. Ask for the questionnaire early, the most recent budget, and the master insurance declarations with wind and hail details. In beach and river markets, verify flood policies and deductible structures that can change the all in payment. In urban towers, parking, storage, and view premiums influence comps. Provide an appraiser packet that lists upgrades, access instructions, and amenity details so adjustments look reasonable. A prepared appraisal packet prevents surprises that could force price changes later.

Broker talk tracks that replace “no doc” with confident alternatives

Clients sometimes ask for no documentation mortgages because they want speed and privacy. Reframe the conversation. Tell them that modern Non QM options are deposit driven, faster than traditional full doc in many cases, and designed for people whose compensation arrives in waves. Promise specificity: full PDFs of the chosen bank statement months, a one page source map that shows where revenue lands, a simple reserve map in months of PITIA, and a cover memo that tells the income story in plain language. This talk track moves clients from a vague idea to a compliance friendly plan that closes.

FAQ to preempt conditions

Do personal bank statements work if all deposits land there. Yes. The account must clearly show business or commission deposits. Remove transfers and non revenue items and be ready to explain platform descriptors.

How do I handle overlapping transfers between accounts? Exclude intra account transfers and keep only the original revenue deposit so income is not double counted.

What if I switched employers this year? Provide the offer letter, compensation plan, and early pipeline reports. A longer bank statement window can help, and strong reserves offset short tenure.

Can I combine bank statements and assets to qualify? Yes. Hybrid approaches are common when commissions are uneven. Use assets to add stability and to thicken reserves.

Will an interest only period hurt my ability to build equity? No. Equity can come from appreciation and targeted principal curtailments after large commission months. The plan matters more than the default amortization schedule.

Do I need tax returns? Not for the bank statement path. You still need sourced funds, consistent identity across documents, and a believable income map.

Internal links and calls to action

Move prospects from interest to action with a clearly marked path. Start intake through Get a Non-QM quick quote to capture account lists and the preferred statement window. Teach mechanics with the Bank statement mortgage page. Keep the Investor DSCR loan resource ready when an investment purchase makes more sense than personal income. For cross border or relocating clients, reference Foreign National mortgage options. Reinforce brand authority by positioning NQM Funding as a Non QM Loans partner that thrives on complex commission income when the documentation is clean and reproducible.