Using Your Year-End Bonus for a Down Payment: 2026-2027 Rules
Millions of Americans get their biggest check of the year in December-January. Here's how much actually lands (the 22% trap), how lenders source it, and how to stack it with grants to buy in spring 2027.
Quick Picks — Turn the Bonus Into Keys
- Pre-Approval →
Get pre-approved now
Bonus lands Jan? Lenders count it with an award letter — start the file today
- Find Grants →
Stack with free DPA money
Bonus covers part, grants cover the rest — many programs reset funding Jan 1
- Check Rates →
Rate watch: Dec 9 Fed
85% hike odds — compare lenders and know your number before the meeting
Sponsored — soft credit check only, no score impact.
Year-End Bonus → Down Payment: The Rules
A year-end bonus is earned income, not a gift — no gift letter needed. But plan on the NET: employers withhold a flat 22% federal supplemental rate + FICA (7.65%) + state, so a $10,000 bonus nets roughly $6,700-$7,500. Sourcing: deposits within your last 2 bank statements must be documented (pay stub or bonus award letter); outside 60 days it counts as regular savings. Bonus income also counts toward qualifying income if you have a 2-year receipt history + likelihood of continuance. Best 2027 play: stack the bonus with down payment assistance — many state programs reset funding January 1.
Quick Answer: Yes, Bonus = Cleanest DP Source — Plan on the NET
A bonus is earned income: no gift letter, no donor paperwork — the easiest large deposit to source. The trap is taxes: your $10K bonus lands as roughly $6,700-$7,500 after 22% federal + FICA + state withholding. Deposit it, document it with your bonus letter or pay stub, and stack it with DPA grants — many reset funding January 1.
The 22% Trap: What Your Bonus Actually Nets
Employers withhold a flat 22% federal supplemental rate on bonuses under $1M — plus 7.65% FICA and 0-9.9% state. Don't plan your down payment on the gross number:
| Gross Bonus | Fed 22% | FICA 7.65% | State | You Keep |
|---|---|---|---|---|
| $5,000 | -$1,100 | -$383 | -$150 to -$500 | ~$3,600-$4,000 |
| $10,000 | -$2,200 | -$765 | -$300 to -$990 | ~$6,700-$7,500 |
| $25,000 | -$5,500 | -$1,913 | -$750 to -$2,475 | ~$16,800-$18,300 |
| $50,000 | -$11,000 | -$3,825 | -$1,500 to -$4,950 | ~$33,700-$36,200 |
Under-withheld? If your bracket is above 22%, set aside the difference for April. Over-withheld? It comes back as a refund — which can also go toward the house.
Lender Rules: Sourcing Your Bonus
Lenders review your last 2 bank statements. Any deposit over ~50% of your monthly income must be sourced. For a bonus, that's trivially easy:
- Bonus letter or award notice — HR letter stating amount and pay date. Gets it counted even before it lands.
- Pay stub — bonus appearing on a stub is fully sourced, zero questions.
- Outside the 60-day window — it's just savings; no sourcing needed at all.
- Bonus as qualifying income — separate question: to count bonus income toward your DTI, lenders want a 2-year receipt history + expectation it continues.
Bonus vs gift: a bonus never needs a gift letter. A check from mom or dad does — and must come from an acceptable donor with a paper trail. If you're getting BOTH, keep them in separate deposits so each is easy to document.
The Power Move: Bonus + DPA Stacking
Your bonus rarely has to carry the whole down payment. State and local down payment assistance covers grants and forgivable seconds of $5K-$50K+. Example on a $350K FHA purchase:
- 3.5% down = $12,250
- Your net bonus = -$7,000
- State DPA grant = -$5,000 (forgivable)
- = $250 out of pocket for the down payment
Timing edge: many DPA programs refund/replenish January 1. Applying in December-January puts you first in line for fresh 2027 funding while others wait for spring.
Check DPA programs in your state →Buy Now vs Wait for the Bonus?
With ~85% odds of a Fed hike on December 9 and prices projected +3-5% into spring 2027, "wait for the check" isn't free. Model it: if the bonus lands in January and closes your DP gap, a 60-day wait may still win. But if you're already at 3-3.5% down, buying before the hike + before spring competition could beat the bonus delta — a lock-and-shop or preapproval today answers that with real numbers.
See today's rates before the Dec 9 meeting →Frequently Asked Questions
Can I get pre-approved before the bonus lands?
Yes — get pre-approved now with your current assets and note the bonus separately. When it lands, provide the stub/letter and update the file. Pre-approval letters can be reissued in hours.
Does the bonus count toward qualifying income?
Only with a 2-year history of receiving it + reasonable expectation it continues. First-year bonus? It still works fine as a down payment source — just not as income for DTI.
RSU vest or stock bonus?
Vested RSU proceeds work for down payments — source them with the vesting statement + brokerage deposit record. Same 60-day sourcing rules apply.
Bonus Lands Soon — Get Your File Ready Now
Pre-approval takes minutes and your bonus documents drop in later. With a Dec 9 hike likely, knowing your number early is free insurance.
Get Pre-Approved — 2 Min →Related: 2027 DPA programs by state · how lenders count bonus income · lock before Dec 9?