Selling Guide

Published June 02, 2021

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What are the requirements for retirement, pension, and government annuity income?

Retirement, Government Annuity, and Pension Income

The following table provides verification requirements for retirement, government annuity, and pension income.

Verification of Retirement, Government Annuity, and Pension Income
 

Document current receipt of the income, as verified by

  • a statement from the organization providing the income,
  • a copy of retirement award letter or benefit statement,
  • a copy of financial or bank account statement,
  • a copy of signed federal income tax return,
  • an IRS W-2 form, or 
  • an IRS 1099 form.
  If income from a government annuity or pension account will begin on or before the first payment date, document the income with a benefit statement from the organization providing the income. The statement must specify the income type, amount and frequency of the payment, and include confirmation of the initial start date. 
 

If retirement income is paid in the form of a distribution from a 401(k), IRA, or Keogh retirement account, determine whether the income is expected to continue for at least three years after the date of the mortgage application. Eligible retirement account balances (from a 401(k), IRA, or Keogh) may be combined for the purpose of determining whether the three-year continuance requirement is met.

Note: The borrower must have unrestricted access to the accounts without penalty.

If a borrower’s retirement, annuity, or pension income is validated by the DU validation service, DU will issue a message indicating the required documentation. This documentation may differ from the requirements described above. See B3-2-02, DU Validation Service.

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

Click here to see a list of all Top Trending Selling FAQs for March 2021.

 

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