Verification of Seasonal Income
Seasonal income must be documented by obtaining the following:
- a completed Request for Verification of Employment (Form 1005 or Form 1005(S)); or
- the borrower’s recent paystub and IRS W-2 forms covering the most recent two-year period. (Signed federal income tax returns may also be required to verify unemployment income related to seasonal employment.)
A verbal VOE is also required from each employer. See B3-3.1-07, Verbal Verification of Employment for specific requirements.
As this income type may be hourly refer to B3-3.1-01, General Income Information for additional information on calculating variable income. Also see B3-3.1-02, Standards for Employment Documentation for additional information about verifying employment income.
The lender must verify the following for seasonal income.
|✓||Verification of Seasonal Income|
|Verify that the borrower has worked in the same job (or the same line of seasonal work) for the past two years.|
|Confirm with the borrower’s employer that there is a reasonable expectation that the borrower will be rehired for the next season.|
|For seasonal unemployment compensation, verify that it is appropriately documented, clearly associated with seasonal layoffs, expected to recur, and reported on the borrower’s signed federal income tax returns. Otherwise, unemployment compensation cannot be used to qualify the borrower. See B3-3.1-09, Other Sources of Income, for more information on unemployment benefits.|
For additional information, see B3-3.1-05, Secondary Employment Income (Second Job and Multiple Jobs) and Seasonal Income.