Short answer
Yes. On a Fannie Mae conventional loan, the lender can count your full monthly base pay plus allowances, such as the housing (quarters) allowance, rations, clothing, flight, hazard or proficiency pay. The lender needs your most recent Leave and Earnings Statement (LES), dated within 120 days of closing, plus a job check. Active duty has no minimum history; Guard and Reserve pay needs 12 months.
What will the lender ask for?
- Your most recent LES, dated within 120 days of the note date.
- A verification of your service, done close to closing.
- For Guard or Reserve pay, a 12-month history of that income.
Will every allowance count?
Usually, if it's expected to continue. Some allowances depend on where you're stationed or the job you do. If there's a sign one will drop, such as orders to a lower-cost area, the lender uses the lower amount, and if it will stop, it's left out.
Does tax-free pay help me qualify?
It can. Allowances like the housing allowance generally aren't taxed. When income is verified as nontaxable and likely to stay that way, Fannie Mae lets the lender add an amount, usually a quarter of that income, to reflect the taxes you don't pay. That can raise your qualifying income.
How does FHA treat military pay?
HUD's Handbook 4000.1 counts base pay, Basic Allowance for Housing, Basic Allowance for Subsistence, clothing allowances, flight or hazard pay and proficiency pay, using your current amounts from your Leave and Earnings Statement. Military education benefits don't count. If your Expiration Term of Service date falls in the first 12 months of the loan, the income counts only if you state that you intend to keep serving.
Should I use a VA loan instead?
If you're eligible, compare both. VA loans have their own income rules and benefits, and some buyers still pick conventional. See the VA loan guide and using a VA loan on active duty.
Sources
- HUD Single Family Housing Policy Handbook 4000.1, Update 18 (August 2026), Military Income (TOTAL)
- Fannie Mae Selling Guide B3-3.3-05, Military Income
- Fannie Mae Selling Guide B3-3.1-01, General Income Information (nontaxable income)
Checked November 2, 2026. Rules and dates change, so confirm current details before you rely on them.
General information only, not tax or legal advice. Program availability, eligibility and terms vary by lender and are subject to change and to underwriting approval. Not a commitment to lend.