Income Calculator
Calculating income for self-employed borrowers is not easy and can be time consuming and complicated for even the most seasoned originators. With a growing workforce of self-employed borrowers, and multiple options available, originators need a clear way to calculate income that’s both accurate and efficient. With Fannie Mae’s latest solution, we offer a new way to calculate income that increases the certainty of the calculation and helps reduce cycle time.
Available through a free web interface or an automated integration with a partnering technology service provider (TSP), Income Calculator can help:
- Easily calculate income for borrowers who are self-employed or have ownership interest in a business.
- Maximize the borrower’s income by utilizing allowable add-backs not found in 4506-C tax return transcript data, which may result in lower DTI due to higher income being calculated.
- Determine the qualifying monthly income before submitting to DU.
- Originate with confidence – we offer enforcement relief of reps and warrants on the income calculation.
Income Calculator Availability
Every day, 24 hours a day, except from 1 a.m. to 5 a.m. ET the first and third Sundays each month due to maintenance.
How Income Calculator works
1. Borrower provides lender with tax returns during the application process.
2. Lender inputs borrower tax return data into Fannie Mae’s Income Calculator web interface. No NPI is collected.
3. Income Calculator generates an immediate response. The Findings Report is displayed to the originator on the web interface.
4. Lender reviews the Income Calculator Findings Report, paying careful attention to the documentation and data integrity messages.
5. Lender retains the Findings Report in the loan file.
6. Lender ensures the monthly qualifying income used for DU or manual underwriting is not more than the Income Calculator amount. Income Calculator never overrides data submitted to DU.
7. Lender ensures the loan file contains the documentation per the Income Calculator Findings Report.
8. Prior to delivery, the lender ensures the DU casefile ID is associated to Income Calculator. No Special Feature Code (SFC) is required.
9. If all conditions are met, the loan is eligible for enforcement relief from reps and warrants related to the income calculation.
1. Borrower provides lender with tax returns during the application process or authorizes technology service provider (TSP) to extract tax return data from an authoritative source (such as an e-filer).
2. TSP extracts data from tax returns and submits data to Income Calculator. No NPI is transmitted.
3. Income Calculator generates an immediate response. The Findings Report is relayed to the originator through the TSP interface.
4. Lender validates the accuracy of the data provided to the calculator by the TSP.
5. Lender reviews the Income Calculator Findings Report, paying careful attention to the documentation and data integrity messages.
6. Lender retains the Findings Report in the loan file.
7. Lender ensures the monthly qualifying income used for DU or manual underwriting is not more than the Income Calculator amount. Income Calculator never overrides data submitted to DU.
8. Lender ensures the loan file contains the documentation per the Income Calculator Findings Report.
9. Prior to delivery, the lender ensures the DU casefile ID is associated to Income Calculator. No Special Feature Code (SFC) is required.
10. If all conditions are met, the loan is eligible for enforcement relief from reps and warrants related to the income calculation.
Available methods to calculate self-employed income include:
| Fannie Mae Income Calculator integrated through TSP | Fannie Mae Income Calculator web interface | DU validation service | Approved vendor tools | |
| What data is needed? | Tax returns | Tax returns | Tax transcripts | Tax returns |
| How is the data extracted? | Exported from e-filers or Optical Character Recognition technology | Manual data input | Report provider obtains data from IRS | Optical Character Recognition |
| Component eligible for enforcement relief of reps and warrants? | Income calculation | Income calculation | Income calculation and data integrity | Income calculation |
| When is the tool available? | Now | Now | Now (through DU) | Now |
| Is there a cost? | Yes – through contract with an authorized TSP | No | Yes – through contract with an authorized report provider | Yes – through contract with an approved vendor |
| What is the response time? | Up to ~2 hours based on TSP response | Immediate | Up to ~5 days based on IRS response | Up to ~2 hours based on vendor response |
| Does it collect NPI? | No | No | Yes | Yes |
| What self-employment types are eligible for enforcement relief? | All self-employment types, excluding rental income (varies by TSP) | All self-employment types, excluding rental income | Sole Proprietors - Schedule C | All self-employment types, including self-employment income generated from rental properties |
| Who maintains the calculation? | Fannie Mae | Fannie Mae | Fannie Mae | Vendor (with Fannie Mae oversight) |
