In the world of conventional financing, specifically, Freddie Mac, there are a number of policies changes relating to income requirements. Below are the changes pertaining to loans submitted to underwriting on or after March 6, 2017:
- Employment Income
- Pay stubs are no longer required to reflect at least 30 days of earnings. A pay stub documenting all YTD earnings for the most recent calendar year is now acceptable.
- Commission Income
- Commission income that is less than 25% of the borrower’s total income will not require 1040s and will not need un-reimbursed expenses to be deducted.
- Dividend or Interest Income
- Year-end asset account statements for the most recent two years reflecting the dividends/interest paid out may now be used in lieu of tax returns.
- Self-Employment Verification
- If a business is in existence five or more years, one year of tax returns must be provided. If less than five years, the two most recent years of tax returns must be provided – regardless of Streamline or Standard documentation feedback.
- A Verification of Business (VOB) can now be dated 120 days prior to the Note Date.
If you have any questions regarding your qualifications for a home loan, please contact me today. Balner and Co can provide resources to get your questions answered!