Freddie Mac Home (opens in new window) Single-Family Division (opens in new window). Launch Ask Poli for Sellers . Sources "B3-3. Temporary Leave Income. Subpart B2: Eligibility. An inflation -adjusted annuity is a financial product that provides a stream of income that increases with inflation. Determine the net documented assets. (Biweekly gross pay x 26 pay periods) / 12 months. Document a two-year history of the income, as verified by copies of the borrower's signed federal income tax returns, or; copies of account statements. Develop an average income from the last two years (according to the Variable Income section of B3-3. Verification of Retirement, Government Annuity, and Pension Income Document current receipt of the income, as verified by. The total qualifying income that results may not exceed the borrower's regular employment income. (M SG ID 0 0 08). Guidance for documenting access to income and business liquidity If the Schedule K-1 reflects a documented, stable history of receiving cash distributions of income from the business consistent with the level of business income being used to qualify, then no further documentation of access to. Learn MoreIf the borrower is financing a second home or investment property that is underwritten through DU and the borrower will have one to six financed properties, Fannie Mae’s standard eligibility policies apply (for example, LTV ratios and minimum credit scores). Lender must document 3–year continuance. The Fannie Mae guidelines allow borrowers to use retirement income, such as pensions, Social Security benefits, and distributions from retirement accounts like 401 (k)s or IRAs, for mortgage qualification. Income payments from deferred annuities are also taxed as income when received. Fannie Mae Cash-Out Refinance . If rental income is claimed on Schedule K-1 can the distributions be used for qualifying purposes? In order to include a positive net rental income received through a partnership or an S corporation in the borrower’s monthly qualifying income, the lender must evaluate it according to Fannie Mae’s guidelines for income received from a. While every effort has been made to ensure the reliability of the content in Ask Poli, Fannie Mae's Selling Guide and its updates, including Guide Announcements and Release Notes, are the official statements of Fannie Mae's policies and procedures, and should be complied with in the event of discrepancies between information provided. HomeReady permits lower credit scores. 02 C Ordinance or Law Insurance. Fannie Mae’s underwriting guidelines emphasize the continuity of a borrower’s stable income. Participants may join the conference call in listen-only mode via the webcast link below. checking or savings accounts; investments in stocks, bonds, mutual funds, certificates of deposit, money market funds, and trust accounts; the amount vested in a retirement savings account; and. Borrowers whose qualifying income is greater than 50% and is less than or. If the part-time income is variable, refer to FAQ: How is variable income calculated? For information on part-time income that is seasonal, refer to FAQ: What are the requirements for seasonal income?Temporary leave income: $2,000 per month. Fannie Mae does not set a minimum remaining term requirement at the time of loan purchase. These can include various sources such as child support, alimony, social security income, VA benefits, interest income, 401K/pension income, or any other documented income that is deemed non-taxable. Launch Ask Poli for Sellers . The stable and reliable flow of income is a key consideration in mortgage loan underwriting. Tip income can be verified using a Request for Verification of Employment (Form 1005 or Form 1005 (S)), or recent paystubs and IRS W-2 forms. 02 B Business Income (including Rental Value) Insurance. Obtain a copy of the borrower’s disability policy or benefits statement from the benefits payer (insurance company, employer, or. The December Selling Guide update expands eligibility to allow the sale of loans secured by single-width manufactured homes; updates requirements related to the use of retirement, government annuity, and pension income; modifies our seller/servicer eligibility standards related. Freddie Mac Form 65 • Fannie Mae Form 1003 URLA Effective 9/2020 • Instructions Revised 3/2020 1b. Examples of income types without a defined expiration date. 70%. Fannie Mae has scheduled a conference call to discuss the company's results today at 8:00 a. PART A Doing Business with Fannie Mae. Employment-Related Assets as Qualifying Income. citizens. a. (See B3-3. Lenders must verify this income and ensure it will continue for at least three years from the date of the mortgage application. Be sure to consult your automated underwriting system response and program descriptions. The primary beneficiary of the trust must be the individual (s) establishing the trust. For depository assets (checking and savings accounts, money market funds, and certificates of deposit), DU will require the following: two consecutive monthly bank statements (60 days of account activity) for all purchase transactions, or. Maximum LTV, CLTV, and HCLTV Ratio. Fannie Mae's declining bonus income refers to a specific policy within Fannie Mae's mortgage lending guidelines that focuses on the pattern of a borrower's bonus income over time. The requirement to reduce the value of retirement assets consisting of stocks, bonds, and mutual funds by 30% when measuring the three-year continuance for retirement income was removed from the Selling Guide B3-3. c. Established during the Great Depression, Fannie Mae purchases mortgages from lenders, converts them into mortgage-backed securities, and sells them to. Fannie Mae purchases or securitizes mortgages that are secured by properties that have a business use in addition to their residential use, such as a property with space set aside for a day care facility, a beauty or barber shop, or a. Subpart B1: Loan Application Package. Fannie Mae HomeView® can be used to satisfy the homeownership education. See B3-3. The total qualifying income that results may not exceed the borrower's regular employment income. Non-taxable income refers to earnings that are exempt from income taxes. the borrower's recent Leave and Earnings Statement (LES) for military income and entitlements. PART B Origination thru Closing. the business provides more than $12 billion of protected income payments. Employment-Related Assets as Qualifying Income. The following table provides verification requirements for retirement, government annuity, and pension income. Make sure you have your annuity and tax documents organized before you apply for the loan and you should be well-positioned to qualify. Portfolio Manager, or Fannie Mae’s Single-Family Servicer Support Center at 1-800-2FANNIE (1-800-232-6643) with any questions regarding this Lender Letter. a copy of retirement award letter or benefit statement, a copy of financial or bank account statement, a copy of signed federal income tax return, an IRS W-2 form, or. 1 The risk profile of this loan casefile appear s to meet Fannie Mae's guidelines. 1-09, Other Sources of Income. For more information, see B3-3. Updated November 2023. The statement must specify the income type, amount and frequency of the payment, and include confirmation of the initial start date. a copy of signed federal income tax return, an IRS W-2 form, or. Annuities are just one of the many financial products designed to offer income for retirees. 2-06, Fannie Mae Flex. The Guaranteed Minimum Withdrawal Benefit (GMWB) is a feature of certain annuity contracts. The total qualifying income that results may not exceed the borrower's regular employment income. However, Fannie Mae does allow certain exceptions to this policy for boarder income and properties with accessory units. an IRS 1099 form. Stable and Predictable Income. Tip Income Fannie Mae allows tip income to be included in qualifying income if the lender can verify that the borrower has received the income for the last two years. Six months' reserves for the following: a two- to four-unit principal residence transaction, an investment property transaction, and. Temporary leave income: $2,000 per month. Non-liquid assets do not have to be verified, and will not be identified in a verification message. mortgage credit certificates. Need additional assistance options for your down payment. Insurance companies usually offer it to individuals eager to secure a steady cash flow after retirement. Standard Freddie Mac. Impact of COVID-19 on Servicing and LL-2021-07, COVID-19 Payment Deferral and Fannie Mae Flex Modification for COVID-19 Impacted Borrowers. To calculate asset depletion income for Fannie Mae, you will need to follow these steps: 1. Stable and Predictable Income. The lender must verify the borrower's income in accordance with Section B3–3. 12 CFR 30, Appendix A, and 12 CFR 160. Welcome to an improved Seller/Servicer Guide. When a loan casefile receives an Approve/Ineligible recommendation, the lender should: Review the DU loan data for accuracy and verify that all income, assets, and liabilities were accurately recorded and fully disclosed by the borrower. Whether you’re just thinking about buying a home or have already started shopping, Fannie Mae offers expert guidance and insight into the homebuying process, your mortgage options, and what to expect along the way. Fannie Mae and Freddie Mac offer conventional mortgages with low down payments and homeownership education. 1Secondary employment must be documented by obtaining the following: a completed Request for Verification of Employment ( Form 1005 ); or. Schmidt also oversees the company’s alternative asset investing and the hedging of variable annuity guarantees and chairs the Senior Asset Liability Committee. Opinions, analyses,. 12 CFR 30, Appendix A, and 12 CFR 160. Social Security, VA, or other government retirement or annuity. 1 4. Annuities can offer guaranteed income, which is particularly. 501. Fannie Mae’s underwriting guidelines emphasize the continuity of a borrower’s stable income. foster-care income. The lender or servicer must ensure that the insurer, policy, and coverage meet Fannie Mae's requirements. the amount and duration of the borrower's “temporary leave income,” which may require multiple documents or sources depending on the type and duration of the leave period; and. Negative business income is considered “zero” for annual income calculations. Retirement income: Income from retirement accounts (like a 401(k), IRA, 403(b), etc. 1-01, General Income Information (08/07/2019) CONFIDENTIAL Calculating Income 25 Documentation Fannie Mae Selling Guide Check For Investor Overlays For Timing Of Verbal VOEOpting for a lottery annuity provides several advantages, including a guaranteed income stream and reduced tax burden. 2-01, Underwriting Factors and Documentation for a Self-Employed Borrower. 1, Employment and Other Sources of Income. Fannie Mae purchases or securitizes ATR Exempt Loans as long as such loans meet the other eligibility and underwriting requirements described in this Guide. Refer to B3-3. Regular income amount: $6,000 per month. Fixed Annuity: In a fixed annuity, the insurance company guarantees a fixed rate of return on the premium, and the annuitant receives regular payments of a fixed amount. Calculating the Borrower’s Housing Expense-to-Income Ratio. a copy of retirement award letter or benefit statement, a copy of financial or bank account statement, a copy of signed federal income tax return, an IRS W-2 form, or. the lender must evaluate it according to Fannie Mae’s guidelines for income received from a partnership or an S corporation. If income from a government annuity or pension account will begin on or before the first payment date, document the income with a benefit statement from the organization providing the income. the amount and duration of the borrower's “temporary leave income,” which may require multiple documents or sources depending on the type and duration of the leave period; and. This. financial markets. The maximum can be exceeded up to 45% if the borrower meets the credit score and reserve requirements reflected in the Eligibility Matrix . Requirement. Base Pay (Salary or Hourly) Income. The stable and reliable flow of income is a key consideration in mortgage loan underwriting. , ET. Document regular receipt of income for the most recent 12 months. It does not apply to disability income that is received from the Social Security Administration. It provides predictability and stability but requires careful consideration, given its long-term commitment and potential for higher initial payments. The documentation must be in compliance with B1-1-03, Allowable Age of Credit Documents and Federal Income Tax Returns. Fannie Mae permits lenders to request specific or limited documentation from the IRS when submitting a request with the borrower’s consent on IRS Form 4506-C (such as requesting only the transcript for forms W2 or 1099), rather than always requiring the full transcript of the borrower’s personal income tax return (aka Form 1040). 3-01, Fannie Mae Short Sale. a cash-out refinance transaction with a DTI ratio greater than 45%. Freddie Mac HomeOne ℠. Income property, 75 percent. 1-02, Standards for Employment Documentation. 1-09, Other Sources of Income, for boarder income requirements, and B5-6-02,. If the Net Monthly Rental Income is a “breakeven” amount, the user must enter either $0. 1 The risk profile of this loan casefile appears to meet Fannie Mae's guidelines. For borrowers putting in sweat equity to their homes for HomeReady loans, Fannie Mae no longer requires a 3% personal funds contribution nor caps the sweat equity contribution towards a down payment. 2 (b) for additional information about base non-fluctuating and fluctuating hourly earnings types. A 45% DTI ratio can sometimes be considered depending on a borrower's credit score and reserve requirements. Form 1007 or Form 1025, as applicable, and either. Example. Her previous roles included litigation partner at Jenner & Block and general counsel at Fannie Mae. CONFIDENTIAL Fannie Mae Selling Guide Continuance of Income Calculating Income 24 See B3-3. The servicer must determine the borrower’s housing expense-to-income ratio as outlined in Evaluating a Borrower’s Ability to Make a Cash Contribution in D2-3. The value of the asset and any related documentation must meet the requirements. This feature guarantees the annuity owner a minimum income stream, regardless of market conditions, by allowing them to withdraw a fixed percentage of their investment each year without depleting the principal. The servicer must determine the borrower’s housing expense-to-income ratio as outlined in Evaluating a Borrower’s Ability to Make a Cash Contribution in D2-3. monthly income from annuities, insurance policies, retirement funds, pensions, disability or death benefits, rental. What are the income eligibility requirements for HomeReady borrowers? Effective July 20, 2019, the income limit for all HomeReady loans is 80% of area median income (AMI) for the property’s location, including properties in low-income census tracts. If income from a government annuity or a pension account will begin on or before the first payment date, document the income with a benefit statement from the organization providing the income. Fannie Mae, October 2. Tax returns are required if the borrower. This FAQ document provides responses to common questions related to Fannie Mae’s property eligibility and appraisal policies. The following table provides verification requirements for retirement, government annuity, and pension income. They offer an alternative to traditional. If the retirement assets are in the form of stocks, bonds, or mutual funds, the account must meet the requirements of B3-4. Home Possible Income Limit – For the specific census tract, this is the maximum borrower income allowed to qualify for Home Possible. For additional information, see B3-4. Fannie Mae’s underwriting guidelines emphasize the continuity of a borrower’s stable income. checking or savings accounts; investments in stocks, bonds, mutual funds, certificates of deposit, money market funds, and trust accounts; the amount vested in a retirement savings account; and. Tax returns are required if the borrower. Beware of scamsSelling Notice - Area Median Incomes 2023. Guide Resources. Social Security, VA, or other government retirement or annuity. 1-01, General Income Information, for additional information. This Fact Sheet provides additional guidance to help lenders determine eligibility for non-U. ). For additional information, see FAQs: Using Income from Retirement and Employment-related Assets and B3-3. The lender must verify the borrower's income in accordance with Section B3–3. Mortgage qualification requirements for retirees: Assets. Chapter B3-2: Desktop Underwriter (DU) Chapter B3-3: Income Assessment. Social Security, VA, or other government retirement or annuity. 1-03, Base Pay (Salary or Hourly), Bonus, and Overtime Income. Allowable Age of Credit Documents. Lenders are responsible for making the final determination of whether the borrower’s specific income source has a defined expiration date. Funds needed to complete the. " Selling Guide: Fannie Mae Single Family. Employment Documentation Provided by the Borrower’s Employer. Refer to the applicable topics in Chapter B3-3, Income Assessment for additional information about specific tax return requirements. 4 2019QYTD 2023 $0 $10 $20 $30 Base. Fannie Mae. an IRS 1099 form. Fannie Mae. Fannie Mae has scheduled a conference call to discuss the company's results at 8:00 a. Note: Some of these asset types. Introduction. Fannie Mae considers sweat equity an acceptable source of funds for HomeReady loans when the borrower participates in an affordable housing purchase program run by an eligible. The lender must obtain. Lenders, though, will want to verify that your annuity payments will continue for at least the next 3 years. If your mortgage is owned or guaranteed by either Freddie Mac or Fannie Mae, you may be eligible toYou can calculate your DTI ratio by dividing your recurring minimum expenses by your total monthly income. Are concerned about qualifying for. . 01 or $-0. 501. These payments can be made for a predetermined period or continue for the annuity holder's lifetime. 01. They call this practice “grossing up” income because you. 2. 9 $9. a copy of signed federal income tax return, an IRS W-2 form, or ; an IRS 1099 form. As a result of the tax law changes that will prevent lenders from being able to identify unreimbursed business expenses, the requirements for IRS Form 2106 have been removed and the automobile allowance policy has been changed. Social Security, VA, or other government retirement or annuity. the borrower’s recent Leave and Earnings Statement (LES) for military income and entitlements. The total qualifying income that results may not exceed the borrower's regular employment income. Retirement, Government Annuity, and Pension Income . Lenders have difficulty using income from the growing number of gig economy workers* to. For additional information, see B3-3. The Selling Guide has been updated to include changes to the following:. 02 C Ordinance or Law Insurance. The sum is $900,000. If you have additional questions, Fannie Mae customers can visit Ask Poli to get information from other Fannie Mae published. The servicer must process a transfer of ownership in accordance with Chapter D1-4, Transfers of Ownership. See the applicable section below for information on Social Security income. Temporary leave income: $2,000 per month. The lender must verify employment income for all borrowers whose income is used to qualify for the mortgage loan. All of the above calculations must be compared with the documented year-to-date base earnings. All guidance specific to COVID-19 will be communicated through Lender Letters . These limits vary based on location and property size. Net proceeds from a loan against the cash value or from the surrender of a life insurance policy are an acceptable source of funds for the down payment, closing costs, and reserves. An annuity is a contract between an individual and an insurance company or financial institution in which the individual pays a lump sum or periodic payments in exchange for a guaranteed stream of income in the. S. , guaranteed 40 hours/week). 1-09, Other Sources of Income. Fannie Mae. PART B Origination thru Closing. Note: For loan casefiles that are not. 501. To be eligible as a HomeReady mortgage, the total annual qualifying income may not exceed 80% of the AMI for the property’s location. part-time job, second job, or seasonal income. Subpart B1: Loan Application Package. Items required for a complete BRP : Form 710, or equivalent, that is completed in its entirety. Income from Other Sources have retirement income from two different sources, sum the amounts and list the total once on the form as “Retirement”). Refer to the applicable topics in Chapter B3-3, Income Assessment for additional information about specific tax return requirements. In addition, some Fannie Mae mortgages require that payments not exceed 28% of the borrower's gross monthly income. 1-09, Other Sources of Income in December 2020. Income (or loss) from secondary self-employment can be excluded if the borrower is using non-self-employment income to qualify (for example, salary or retirement income). An inflation -adjusted annuity is a financial product that provides a stream of income that increases with inflation. equivalent to 25% of the non-taxable income to the borrower’s income. The documentation must support the history of receipt, if applicable, and the amount, frequency, and duration of the income. Employment Documentation Provided by the Borrower’s Employer. The lender must verify the borrower's income in accordance with Section B3–3. Asset Requirements. a copy of signed federal income tax return, an IRS W-2 form, or. When submitting rental income to DU for an investment property: The lender should calculate the net rental income amount for each property and enter the amount (either positive or negative) in the Net Monthly Rental Income in Section 3. Visit our consumer alert web page for more information, and please report any such scams to us: 1-800-2FANNIE (1-800-232-6643) Option 4. To learn more about sweat equity, click here. The purpose of scrutinizing declining bonus. When a component of the loan is validated by DU, the loan may. Whether you’re just thinking about buying a home or have already started shopping, Fannie Mae offers expert guidance and insight into the homebuying process, your mortgage options, and what to expect along the way. For all mortgage loans (existing and new construction), the credit documents must be no more than four months old on the note date. Lender must document 3–year continuance. 1, Employment and Other Sources of Income. Total verified liquid assets: $30,000. 2-02, Loans with Resale Restrictions: Eligibility, Collateral and Delivery Requirements, for additional requirements. Both offer flexible underwriting and low-down payments, with unique benefits and limitations. 2-06, Fannie Mae Flex. 25 to determine the Borrower’s monthly gross. While every. The Fannie Mae guidelines allow borrowers to use retirement income, such as pensions, Social Security benefits, and distributions from retirement accounts like 401 (k)s or IRAs, for mortgage qualification. 2-01, Underwriting Factors and Documentation for a. It is important to consider the tax implications of your annuity choices and consult with a tax. Obtain a copy of the note to establish the amount and length of payment. Fannie Mae customers! Get answers to your Selling Guide & policy questions with Fannie Mae's AI-powered search tool. (Weekly gross pay x 52 pay periods) / 12 months. The total qualifying income that results may not exceed the borrower's regular employment income. 16 Document retirement, government annuity, or pension income for Alice Firstimer with one of the following documents: letters from the organization providing the income, retirement. The cash flow analysis can only consider the borrower’s share of the business income or loss, taking into consideration adjustments to business income. the amount and duration of the borrower's “temporary leave income,” which may require multiple documents or sources depending on the type and duration of the leave period; and. b. For additional information, see FAQs: Using Income from Retirement and Employment-related Assets and B3-3. (Biweekly gross pay x 26 pay periods) / 12 months. 1-09, Other. . Vested assets in the form of stocks, government bonds, and mutual funds are acceptable sources of funds for the down payment, closing costs, and reserves provided their value can be verified. 1 $2. 1 $1. 1, 2023. Lender must document 3–year continuance. Are a first-time homebuyer. 7$11. 16, 2020 The Selling Guide has been updated to include changes to the following: Single-width manufactured homes: expanded eligibility to allow the sale of loans secured by single-width manufactured homes If retirement income is paid in the form of a distribution from a 401 (k), IRA, or Keogh retirement account, determine whether the income is expected to continue for at least three years after the date of the mortgage application. “Freddie Mac and Fannie Mae have adopted a new refinance option for loans to borrowers with incomes at or below 100% of Area Median Income and you may be eligible to take advantage of this program. 80% if the owner of the asset (s) being used to qualify is at least 62 years old at the time of closing. The lender must obtain. Fannie Mae’s underwriting guidelines emphasize the continuity of a borrower’s stable income. 49% Total Loan Amount $205,0 0 0. To learn more about income continuance or to discuss your homebuying and mortgage financing options, contact our team by phone at (855)855-4491 or by email at jvmteam@jvmlending. The lender must verify the borrower's income in accordance with Section B3–3. Document the following: a minimum 24-month history of trust income by obtaining copies of the borrower’s signed federal income tax returns for the most recent two years, and. of this publication are granted to Fannie Mae-approved lenders, servicers, and other mortgage finance professionals, strictly for their own use in originating mortgages, selling mortgages to Fannie Mae, or servicing mortgages for Fannie Mae. They can be an essential component of a retirement plan, helping to ensure financial. An annuity is a financial product designed to pay a stream of income in the future. Updated: 05/03/2023. DU does not consider the amount of non-liquid assets. If I have a question on how to document income, I Google “Fannie Mae requirement for…” or “Freddie Mac Doc Matrix”. Annuity payout options determine how and when the funds invested in an annuity contract are paid out to the annuity holder. the business provides more than $12 billion of protected income payments. Loan applications require a lot of paperwork. Verify that the income can be expected to continue for a minimum of three years from the date of the mortgage application. Retirement, Government Annuity, and Pension Income . Fannie Mae Reports Net Income of $12. part-time job, second job, or seasonal income. If income from a government annuity or pension account will begin on or before the first payment date, document the income with a benefit statement from the organization providing the income. If you have additional questions, Fannie Mae customers can visit Ask Poli to get information from other Fannie Mae published sources. When a component of the loan is validated by DU, the loan may. These annuities provide investors with the opportunity to generate returns based on the performance of underlying investments, while also providing a guaranteed income stream during retirement. Requirement. Annually or for any specified period, the total Effective Gross IncomeEffective Gross IncomeOn an annual basis or any specified period, the total of Net Rental Income plus other income per Part II, Chapter 2: Valuation and Income, Section 202: Income Analysis and the applicable products and features in Part III. 25% Fannie. 1-09, Other Sources of Income in December 2020. HomeReady mortgage’s accessory unit income and boarder income flexibilities help to meet the diverse needs of today’s home buyers by expanding access to creditworthy low-income borrowers. Ginnie Mae insures MBSs made up of government-insured or guaranteed loans. Retirees often have significant assets, but limited income, so Fannie and Freddie have found ways to help retirees qualify based on their assets. If the property has resale restrictions, see B 5-5. When consecutive credit documents are in the loan file, the most recent document. 1-09, Other Sources of Income. Determine if there is any information outside of the data submitted to DU that could have affected DU's. g. DU will require the following: a completed Request for Verification of Employment (Form 1005), the borrower's recent paystub and IRS W-2 forms covering the most recent one-year period, or. Lender must document 3–year continuance. (Biweekly gross pay x 26 pay periods) / 12 months. Home, 80 percent. Fannie Mae and Freddie Mac offer a variety of coverage options. The lender must verify employment income for all borrowers whose income is used to qualify for the mortgage loan. See below for maximum gross-up amounts: Fannie Mae and Freddie Mac allow grossing up 125% for conventional financing for fixed income borrowers on social security. d. Download PDF Guide (Published: November 01 2023) Search the Guide (For best result, pose your search like a question. financial markets. The servicer must determine the borrower's new modified mortgage loan terms in accordance with Determining the Fannie Mae Flex Modification Terms in D2-3. Learn more about calculating your DTI ratio. ) The remaining 25% of the gross rent will be absorbed by vacancy losses and ongoing. For mortgages originated for sale to the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation. Temporary leave income: $2,000 per month. Subpart B3: Underwriting Borrowers. Income documentation must be no more than 90 days old as of the date the servicer first determines that the borrower submitted a complete BRP or at the time of a. Hourly. Document the following: a minimum 24-month history of trust income by obtaining copies of the borrower’s signed federal income tax returns for the most recent two years, and. When income from temporary leave is being used to qualify for the mortgage loan, the lender must enter the appropriate qualifying income amount into DU based on the requirements provided in B3-3. comFannie Mae gave current and former employees four options to reallocate their retirement funds — lump-sum distribution, an annuity, the Fannie Mae 401(k) plan or an individual retirement account. The borrower's monthly gross income is defined as the borrower's monthly income amount before any payroll deductions and includes the following items, as applicable: Social Security payments (including Social Security received by adults on behalf of minors or by minors intended for their own support); and. Verification of Retirement, Government Annuity, and Pension Income Document current receipt of the income, as verified by one or more of the following: interest and dividend income (unless other evidence that asset will be depleted) military income. Continuity of Income. 1-01, General Income Information), and use the averaged amount as part of the borrower’s qualifying income as long as the borrower provides current evidence that they own additional property or assets that can be sold if extra income is needed. 3-01, Stocks, Stock Options, Bonds, and Mutual Funds, for. Subpart B3: Underwriting Borrowers. The payments from an ordinary annuity can be fixed or variable, and it has the potential to generate compound interest and. This is the total amount of eligible assets minus the following: The amount of any penalties that would apply if the assets were distributed early. Note: Changes since the last update are marked either NEW or UPDATED. Our sample generally desired immediate over deferred annuities. If income from a government annuity or a pension account will begin on or before the first payment date, document the income with a benefit statement from the organization. mortgage credit certificates. copies of the current lease agreement (s) if the borrower can document a qualifying exception (see Reconciling Partial or No Rental. an IRS 1099 form. Portfolio Manager, or Fannie Mae’s Single-Family Servicer Support Center at 1-800-2FANNIE (1-800-232-6643) with any questions regarding this Lender Letter. Note: The tax-exempt nature of some of the above payments should also be considered. This type of annuity is designed to help individuals maintain their purchasing power over time, as the payments they receive will increase in response to rising prices. Fannie Mae customers! Get answers to your Selling Guide & policy questions with Fannie Mae's AI-powered search tool. IRA (made up of stocks and mutual funds) $500,000. $1. To gross up net income, the Servicer must: Establish the Borrower’s monthly net income in accordance with this Section 9202. Assets used for the calculation of the monthly income stream must be owned individually by the borrower, or the co-owner of the assets must be a co-borrower of the mortgage loan. The lender must verify the borrower's income in accordance with Section B3–3. The servicer must determine the borrower's new modified mortgage loan terms in accordance with Determining the Fannie Mae Flex Modification Terms in D2-3. an IRS 1099 form. Fannie Mae Corporation pays an average of $7,537 in annual employee bonuses. If income from a government annuity or pension account will begin on or before the first payment date, document the income with a benefit statement from the organization providing the income. The lender may use the Request for Verification of Employment (Form 1005) to document income for a salaried or commissioned borrower. 1-09, Other Sources of Income .