Selling Guide

Published December 16, 2020

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What are the loan parameters to use employment-related assets as qualifying income?

Employment-Related Assets as Qualifying Income

All of the following loan parameters must be met in order for employment-related assets to be used as qualifying income:

Loan Parameter Requirement
Maximum LTV, CLTV, and HCLTV Ratio

70%

80% if the owner of the asset(s) being used to qualify is at least 62 years old at the time of closing. If the asset(s) is jointly owned, all owners must be borrowers on the loan and the borrower whose employment-related asset is being used as income must be at least 62 years old at the time of closing. 

Minimum Credit Score

DU: 620

Manual: Higher of 620 or minimum Credit Score per the Eligibility Matrix

Loan Purpose Purchase and limited cash-out refinance only
Occupancy Principal residence and second home only
Number of Units As permitted by occupancy type
Income Calculation/Payout Stream                      Divide “Net Documented Assets” by the amortization term of the mortgage loan (in months).                         

Note: If the mortgage loan does not meet the above parameters, employment-related assets may still be eligible under other standard income guidelines, such as “Interest and Dividends Income,” or “Retirement, Government Annuity, and Pension Income.”

For additional information, see B3-3.1-09, Other Sources of Income.

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