B5-7-03, High LTV Refinance Alternative Qualification Path (12/15/2021)

must comply with the Alternative Qualification Path requirements.

Minimum credit score of 620.

Maximum DTI ratio of 45%.

Verified assets needed to close, when applicable.

The lender is required to manually underwrite all loans subject to the Alternative Qualification Path.

Verbal verification of employment (See B3-3.1-07, Verbal Verification of Employment, for additional requirements.)

Base Pay (salary or hourly)

Tip, Bonus, and Overtime Income

One paystub or a completed Request for Verification of Employment (Form 1005).

Applies to primary employment, secondary employment (second job and multiple jobs), and seasonal income.

One paystub or Form 1005 or one year personal tax return.

A military Leave and Earnings Statement or a verification of employment.

One year personal tax return.

Applies to primary and secondary self-employment.

Copy of divorce decree, separation agreement, court order or equivalent documentation, and one month documentation of receipt.

Lender must obtain standard documentation for this type of income as described in B3-3.1-09, Other Sources of Income.

Lease or one year personal tax return (Form 1007 is not required).

Applies to rental income from subject property or from other properties owned by the borrower.

One of the following:

• award letter,

• one year personal tax return,

• W-2 or 1099 form, or

• one month bank statement reflecting direct deposit.

One of the following:

• award letter,

• one year personal tax return,

• Form SSA-1099, or

• one month bank statement reflecting direct deposit.

Lender must receive:

• the borrower’s written confirmation of their intent to return to work, and

• no evidence or information from the borrower’s employer indicating that the borrower does not have the right to return to work after the leave period.

Regardless of the date of return, the amount of the “regular employment income” the borrower received prior to the temporary leave must be used to qualify.

• Automobile Allowance

• Boarder Income

• Capital Gains Income

• Disability Income - Long-Term

• Employment Offers or Contracts

• Foreign Income

• Foster-Care Income

• Housing or Parsonage Allowance

• Interest and Dividends Income

• Mortgage Credit Certificates

• Mortgage Differential Payments Income

• Non-Occupant Borrower Income

• Notes Receivable Income

• Public Assistance Income

• Royalty Payment Income

• Schedule K-1 Income

• Trust Income

• VA Benefits Income

Lender must determine appropriate documentation.

Examples include (but are not limited to):

• an award letter or equivalent documentation or agreement,

• one paystub or equivalent documentation,

• one year personal tax return,

• IRS 1099 Form, or

• one month bank statement reflecting direct deposit.

• Checking Accounts

• Savings Accounts

• Certificates of Deposit

• Money Mark Accounts

• Stocks, Bonds, Mutual Funds

• Retirement Accounts

• Trust Accounts

• Secured Borrowed Funds

• Grants (Hardest Hit Fund)

• Gifts

One recent statement (monthly, quarterly, or annual) showing asset balance.