Income assessment, now simplified
You asked. We listened. Easy to navigate income requirements are here.
Be ready to serve borrowers more confidently across various income scenarios. The updated Income Assessment section of the Selling Guide now delivers a more intuitive format to help you find what you’re looking for — faster. Language is clearer and navigation is simpler, providing a more streamlined way to evaluate income.
Explore the changes so you can apply updated income guidance with greater ease and better serve homeowners in your community.
Use this legend to get familiar with the types of updates:
New Policy
New topic and/or new content.
Policy Change
Change made to, or removal of, an existing policy.
Policy Clarification
Policy relocated, renamed, or restated for clarity without altering its original intent or requirements.
B3-3.1-01
Stable and Predictable Income
Policy Change
Removed guidance on individuals who change jobs frequently, as a new section on “Job Changes” has been added. See B3-3.2-02 shown below.
Policy Clarification
Restated for clarity without altering its original intent or requirements
B3-3.1-01
Continuance of Income
Policy Change
- Aligned policy for income sources requiring 3-year consistency to be based on the Note Date
- Removed the example of income types with and without defined expiration dates as this information is included within each income source type
B3-3.1-01
Verification of Income for Non-U.S. Citizen Borrowers
Policy Change
Removed the table outlining requirements for non-U.S. citizen borrowers
B3-3.1-01
Non-Occupant Borrower Income
Policy Clarification
Restated for clarity without altering its original intent or requirements
B3-3.1-01
Nontaxable Income
Policy Clarification
- Relocated “Exceptions” to the respective Income Sources
- Renamed “Nontaxable Income”
B3-3.1-01
Income Paid in Virtual Currency
Policy Change
Relocated partial policy content from B3-3.1-09 to this section
Policy Clarification
Restated for clarity without altering its original intent or requirements
B3-3.1-01
Reduced Income Documentation Requirements for High LTV Refinance Loans
Policy Clarification
Relocated policy content from B3-3.5-01 to this section
B3-3.1-01
DU Documentation Requirements
Policy Clarification
- Relocated policy content from B3-3.5-01 to this section
- Relocated DU data entry references to DU Job Aids
B3-3.1-02
Federal Income Tax Return Standards
Policy Clarification
Relocated Tax Return requirement from B3-3.1-02, Standards for Employment Documentation to this section
B3-3.1-02
Using Tax Transcripts in Lieu of Tax Returns
Policy Clarification
Restated for clarity without altering its original intent or requirements
B3-3.1-02
Use of IRS Form 4506-C to Verify Borrower Income Documentation
Policy Clarification
- Restated for clarity without altering its original intent or requirements
- Relocated partial policy content from “Completing and Submitting the IRS Authorization Form” from B3-3.1-06 to this section
- Relocated policy content from B3-3.1-06 to this section
B3-3.1-02
Retaining the Tax Documents
Policy Clarification
- Restated for clarity without altering its original intent or requirements
- Relocated policy content from B3-3.1-06 to this section
B3-3.1-03
Overview
Policy Clarification
Relocated policy content from B3-3.1-10 to this section
B3-3.1-03
Findings Report
Policy Clarification
Relocated policy content from B3-3.1-10 to this section
B3-3.1-03
Technology Service Provider
Policy Clarification
Relocated policy content from B3-3.1-10 to this section
B3-3.1-03
Representations and Warranties Enforcement Relief
Policy Clarification
Relocated policy content from B3-3.1-10 to this section
B3-3.1-03
Additional Requirements
Policy Clarification
Relocated policy content from B3-3.1-10 to this section
B3-3.1-04
Verbal Verification of Employment
Policy Clarification
- Restated for clarity without altering its original intent or requirements
- Relocated policy content from B3-3.1-07, Verbal Verification of Employment
B3-3.2-01
General Documentation Requirements
Policy Clarification
- Relocated policy content from B3-3.1-02 to this section
- Relocated policy content from B3-3.5-01, Income and Employment Documentation for DU to this section
B3-3.2-01
Documentation Provided by the Borrower
Policy Change
Removed the “Requirements – Tax Returns” reference and related guidance to B3-3.1-02
Policy Clarification
Relocated policy content from B3-3.1-02 to this section
B3-3.2-01
Documentation Provided by the Borrower’s Employer
Policy Clarification
- Restated for clarity without altering its original intent or requirements
- Relocated policy content from B3-3.1-02 to this section
B3-3.2-01
Documentation Provided by a Third-Party Employment Verification Vendor
Policy Clarification
Relocated policy content from B3-3.1-02 to this section
B3-3.2-02
Employment History
New Policy
Added a new topic aligned with B3-3.1-01, Base Pay (Salary or Hourly), Bonus, and Overtime Income
B3-3.2-02
Multiple Jobs
New Policy
Added a new section with content sourced from B3-3.1-05
Policy Change
Provided guidance for borrowers working multiple jobs simultaneously
Policy Clarification
- Restated for clarity without altering its original intent or requirements
- Removed the Secondary Employment Income policy as each income is analyzed on its own merit
B3-3.2-02
Employment Gaps
New Policy
Added requirements for loans with employment gaps in the past 12 months
B3-3.2-02
Job Changes
Policy Clarification
- Relocated policy content from B3-3.1-01 to this section
- Renamed as “Job Changes”
B3-3.2-02
Pay Raises
New Policy
Added requirements to allow pay raises from current employment
B3-3.2-02
Employment by Family or Interested Party
New Policy
Added requirements for income earned from a family member or interested party
B3-3.2-02
Foreign Income
Policy Clarification
- Restated for clarity without altering its original intent or requirements
- Relocated policy content from B3-3.1-09 to this section
B3-3.3-01
Overview
New Policy
Created a new section defining Fixed Base Income and Variable Base Income
B3-3.3-01
Fixed Base Income
Policy Change
Updated documentation requirements for fixed base income: now only the most recent W-2 and pay stub are required (instead of W-2s for the past two years plus a pay stub)
Policy Clarification
- Relocated policy content from B3-3.1-03 in this section
- Relocated Bonus and Overtime Income to B3-3.3-02
B3-3.3-01
Variable Base Income
Policy Change
Updated documentation requirements for variable base income: now only the most recent W-2 and pay stub are required (instead of W-2s for the past two years plus a pay stub)
Policy Clarification
Relocated policy content from B3-3.1-03, Base Pay (Salary or Hourly), Bonus and Overtime Income to this section
B3-3.3-02
Bonus, Commission, Overtime and Tip Income
Policy Change
- Updated Bonus and Overtime policies for determining qualifying income
- Updated Commission policy for determining qualifying income
- Updated Tip Income policy for determining qualifying income
Policy Clarification
- Relocated policy content from B3-3.1-03 to this section
- Relocated policy content from B3-3.1-04 to this section
- Relocated policy content from B3-3.1-09 to this section
B3-3.3-03
Employment Offers or Contracts
New Policy
Added that a VVOE is required for Option 2
Policy Change
Changes made to align requirements between Options 1 and 2
Policy Clarification
- Restated for clarity without altering its original intent or requirements
- Relocated policy content from B3-3.1-09 to this section
B3-3.3-04
Housing (Parsonage) and Automobile Allowances
New Policy
- Added documentation requirements
- Reduced history requirement on automobile allowance from 2 years to 1 year to align with housing allowance policy
Policy Clarification
Relocated policy content from B3-3.1-09 to this section
B3-3.3-05
Military Income
Policy Change
Removed reference to no employment gap greater than 12 months that is referenced in the current Section for Secondary Requirements (B3-3.1-05) that applied to Reservists
Policy Clarification
- Relocated reference to Military Income from B3-3.1-03 to this section
- Restated for clarity without altering its original intent or requirements
B3-3.3-06
Mortgage Differential Payments Income
Policy Clarification
- Relocated policy content from B3-3.1-09 to this section
- Restated for clarity without altering its original intent or requirements
B3-3.3-07
Restricted Stock Units and Restricted Stock Employment Income
Policy Clarification
- Relocated policy content from B3-3.1-09 to this section
- Restated for clarity without altering its original intent or requirements
B3-3.3-08
Seasonal Income
New Policy
Added new policy to determine qualifying income
Policy Change
Removed Secondary Employment Income policy
Policy Clarification
Relocated policy content from B3-3.1-05 to this section
B3-3.3-09
Temporary Leave Income
New Policy
Added new policy stating that income continuance requirement is established by the respective income source
Policy Clarification
- Relocated policy content from B3-3.1-09 to this section
- Restated for clarity without altering its original intent or requirements
B3-3.4-01
Documentation Requirements for Current Receipt of Income
Policy Clarification
- Relocated policy content from B3-3.1-09 to this section
- Restated for clarity without altering its original intent or requirements
B3-3.4-01
Reporting Other Income in DU
Policy Clarification
- Relocated policy content from B3-3.5-01 to this section
- Relocated DU data entry references to DU Job Aids
B3-3.4-02
Alimony, Child Support, Equalization Payments, or Separate Maintenance
New Policy
Included new policy on Equalization Payments and incorporated information from Documentation Requirements for Current Receipt of Income
Policy Clarification
Relocated policy content from B3-3.1-09 to this section
B3-3.4-03
Annuity, Pension, or Retirement Income
Policy Change
- Changed policy to include Personal and Insurance Annuities, qualifying income determination, and income continuance
- Expanded documentation requirements for retirement income that begins after closing
Policy Clarification
Relocated policy content from B3-3.1-09 to this section and changed the header name
B3-3.4-04
Boarder Income
Policy Change
Changed policy to include income continuance requirement
Policy Clarification
Relocated policy content from B3-3.1-09 to this section
B3-3.4-05
Capital Gains Income
Policy Clarification
Relocated policy content from B3-3.1-09 to this section
B3-3.4-06
Employment Related Assets as Qualifying Income
Policy Clarification
- Relocated policy content from B3-3.1-09 to this section
- Restated for clarity without altering its original intent or requirements
B3-3.4-07
Foster-Care Income
New Policy
Added new guidance on income trending
Policy Clarification
Relocated policy content from B3-3.1-09 to this section
B3-3.4-08
Interest and Dividend Income
Policy Clarification
- Relocated policy content from B3-3.1-09 to this section
- Restated for clarity without altering its original intent or requirements
B3-3.4-09
Long-term Disability Income
Policy Clarification
- Relocated policy content from B3-3.1-09 to this section
- Restated for clarity without altering its original intent or requirements
B3-3.4-10
Mortgage Credit Certificates
Policy Clarification
- Relocated policy content from B3-3.1-09 to this section
- Restated for clarity without altering its original intent or requirements
B3-3.4-11
Notes Receivable Income
Policy Clarification
- Relocated policy content from B3-3.1-09 to this section
- Restated for clarity without altering its original intent or requirements
B3-3.4-12
Public Assistance Income
Policy Clarification
- Relocated policy content from B3-3.1-09 to this section
- Restated for clarity without altering its original intent or requirements
B3-3.4-13
Royalty Payment Income
Policy Clarification
- Relocated policy content from B3-3.1-09 to this section
- Restated for clarity without altering its original intent or requirements
B3-3.4-14
Section 8 Housing Choice Voucher Homeownership Program Payments
New Policy
Created a new section using content from B3-3.1-09
B3-3.4-15
Social Security Income
Policy Change
Changed policy to include qualifying income determination
Policy Clarification
- Relocated policy content from B3-3.1-09 to this section
- Restated for clarity without altering its original intent or requirements
B3-3.4-16
Trust Income
Policy Clarification
- Relocated policy content from B3-3.1-09 to this section
- Restated for clarity without altering its original intent or requirements
B3-3.4-17
Unemployment Benefits Income
Policy Change
Changed policy to include income continuance and determination of qualifying income
Policy Clarification
- Relocated policy content from B3-3.1-09 to this section
- Restated for clarity without altering its original intent or requirements
B3-3.4-18
VA Benefits Income
Policy Clarification
- Relocated policy content from B3-3.1-09 to this section
- Restated for clarity without altering its original intent or requirements
B3-3.4-19
Schedule K-1 Income <25% Ownership
Policy Clarification
Relocated policy content from B3-3.1-09 to this section
B3-3.5
Self-Employment Income
Policy Clarification
Relocated from B3-3.2 to B3-3.5
B3-3.6
Self-Employment Documentation Requirements for an Individual
Policy Clarification
Moved from B3-3.3 to B3-3.6
B3-3.7
Self-Employment Documentation Requirements for a Business
Policy Clarification
Moved from B3-3.4 to B3-3.7
B3-3.8
Rental Income
Policy Clarification
Moved from B3-3.1-08 to B3-3.8
B3-3.8-01
Associated Policies
Policy Clarification
- Relocated policy content from Associated Policies in B3-3.8, Rental Income to this section
- Restated for clarity without altering its original intent or requirements
B3-3.8-01
Ineligible Properties
Policy Clarification
- Relocated policy content from Associated Policies in B3-3.8, Rental Income to this section
- Restated for clarity without altering its original intent or requirements
B3-3.8-01
Eligibility Standards for Qualifying Rental Income
Policy Clarification
- Relocated guidance previously included in Calculating Monthly Qualifying Rental Income (or Loss) in B3-3.8-01, Rental Income regarding rental income that may be restricted depending on whether the borrower has current housing payment and history of receiving rental income
- Relocated guidance previously included in Calculating Monthly Qualifying Rental Income (or Loss) in B3-3.8-01, Rental Income regarding property management experience requirements and updated information to include additional examples
B3-3.8-01
Lease Agreements
New Policy
Added requirements for lease agreements
Policy Clarification
- Relocated partial policy content from Calculating Monthly Qualifying Rental Income to this section
- Relocated policy content from General Requirements for Documenting Rental Income (Subject and Non-Subject Property) to this section
- Relocated partial policy from Lease Agreements, Form 1007, or Form 1025 in B3-3.8, Rental Income to this section
- Restated for clarity without altering its original intent or requirements
B3-3.8-01
Treatment of Income (or Loss)
Policy Clarification
- Relocated policy content from Treatment of Income (or Loss) in B3-3.8, Rental Income to this section
- Restated for clarity without altering its original intent or requirements
B3-3.8-01
Rental Income Calculation Tools
Policy Clarification
- Relocated policy content from Rental Income Calculation Tools in B3-3.8, Rental Income to this section
- Restated for clarity without altering its original intent or requirements
B3-3.8-01
Reporting of Gross Monthly Rent
Policy Clarification
- Relocated policy content from Reporting of Monthly Gross Rental Income in B3-3.8, Rental Income to this section and changed the header name
- Restated for clarity without altering its original intent or requirements
B3-3.8-02
Eligibility
Policy Clarification
- Relocated partial policy content from Eligible Properties in B3-3.8, Rental Income to this section
- Restated for clarity without altering its original intent or requirements
B3-3.8-02
Documentation to Determine Monthly Gross Rental Income
New Policy
Added policy requirements when lease agreements are not supported by market rents
Policy Clarification
- Relocated partial policy content from General Requirements for Documenting Rental Income (Subject and Non-Subject Property) in B3-3.8-01, Rental Income
- Relocated partial policy content from Documenting Rental Income from Subject Property in B3-3.8-01, Rental income
- Relocated partial policy content from Reconciling Partial or No Rental History on Tax Returns (Schedule E Only) in B3-3.8-01, Rental Income
- Relocated partial policy content from Lease Agreements, Form 1007, or Form 1025 in B3-3.8-01, Rental Income
- Documentation guidance is broken down by purchase and refinance transactions
- Restated for clarity without altering its original intent or requirements
B3-3.8-02
Determination of Qualifying Rental Income
New Policy
Included partial guidance from new policy in Lease Agreements in B3-3.8-01, General Rental Income Information confirming lease validation requirements
Policy Clarification
- Relocated partial guidance previously included in Calculating Monthly Qualifying Rental Income (or Loss) in B3-3.8-0,1 Rental income for property management experience
- Relocated partial guidance previously included in Lease Agreements, Form 1007, or Form 1025 in B3-3.8-01, Rental Income for vacancy
- Calculations are broken down by purchase and refinance transactions; property management experience; and what documentation is being used to determine rental income
- Restated for clarity without altering its original intent or requirements
B3-3.8-02
ADU Limitations
Policy Clarification
- Relocated guidance previously included in Rental Income from an ADU on the Subject Property in B3-3.8-01, Rental income
- Restated for clarity without altering its original intent or requirements
B3-3.8-03
Eligibility
New Policy
New policy regarding the eligibility requirements to use short-term rental income based on property type and property management experience
B3-3.8-03
Documentation to Determine Monthly Gross Rental Income
New Policy
New Policy for the documentation requirements for the use of short-term rental income for purchase and refinance transactions dependent upon transaction type or how long the property has been placed in service
B3-3.8-03
Determination of Qualifying Rental Income
New Policy
New policy for calculating the amount of short-term rental income that can be used in qualifying based on purchase and refinance transactions
B3-3.8-04
Eligibility
Policy Clarification
- Relocated partial guidance previously included in Eligible Properties in B3-3.8-01, Rental Income specific to non-subject properties
- Restated for clarity without altering its original intent or requirements
B3-3.8-04
Documentation to Determine Monthly Gross Rental Income
Policy Clarification
- Relocated partial guidance previously included in General Requirements for Documenting Rental Income (Subject and Non-Subject Property) in B3-3.8-01, Rental income
- Relocated guidance previously included in Documenting Rental Income from Property Other Than the Subject Property in B3-3.8-01, Rental income
- Relocated partial guidance previously included in Calculating Monthly Qualifying Rental Income (or Loss) in B3-3.8-01, Rental Income
- Relocated guidance previously included in Reconciling Partial or No Rental History on Tax Returns (Schedule E Only) in B3-3.8-01, Rental Income
- Relocated guidance previously included in Lease Agreements, Form 1007, or Form 1025 in B3-3.8-01, Rental Income
- Restated for clarity without altering its original intent or requirements
B3-3.8-04
Determination of Qualifying Rental Income
Policy Clarification
- Relocated partial guidance previously included in Calculating Monthly Qualifying Rental Income (or Loss) in B3-3.8-01, Rental Income for property management experience
- Relocated partial guidance previously included in Lease Agreements, Form 1007, or Form 1025 in B3-3.8-01, Rental Income for vacancy factors
- Calculations are broken down by what documentation is being used to determine rental income
- Relocated guidance previously included in Offsetting Monthly obligation for Rental Property Reported through a Partnership or an S Corporation in B3-3.8-01, Rental Income
- Restated for clarity without altering its original intent or requirements
B3-3.8-05
Eligibility
New Policy
New policy regarding the eligibility requirements to use departing residence rental income based on property type and property management experience
B3-3.8-05
Documentation to Determine Monthly Gross Rental Income
New Policy
New Policy for the documentation requirements for the use of departing residence rental income
B3-3.8-05
Determination of Qualifying Rental Income
New Policy
New policy for calculating the amount of departing residence rental income that can be used in qualifying based on purchase and refinance transactions
B3-3.8-06
Eligibility
New Policy
New policy regarding the eligibility requirements to use rental income from investment properties purchased within 45 days of the subject property
B3-3.8-06
Documentation to Determine Monthly Gross Rental Income
New Policy
New Policy for the documentation requirements for the use of rental income from investment properties purchased within 45 days of the subject property
B3-3.8-06
Determination of Qualifying Rental Income
New Policy
New policy for calculating the amount of rental income that can be used in qualifying from investment properties purchased within 45 days of the subject property
