B3-3.2-01, Standards for Employment and Income Documentation (03/04/2026)

The lender must verify employment income for all borrowers whose income is used to qualify for the loan. This verification can be provided by the borrower, by the borrower’s employer, or by a third-party employment verification vendor. The standards for employment documentation are the same for DU loan casefiles as they are for manually underwritten loans. For example, paystubs, W-2s, and tax returns must meet the same requirements without regard to the underwriting method. A year end paystub reflecting earnings from the entire year is acceptable in lieu of the W-2.

When employment is validated through the DU validation service using an asset verification report, the lender is not required to obtain the employment verification documentation described below. DU will provide messaging indicating the documentation required. Lenders must comply with all requirements pertaining to the DU validation service. See B3-2-02, DU Validation ServiceB3-2-02, DU Validation Service for more information.

The following table provides requirements for documentation provided by the borrower.

For tax return requirements, see B3-3.1-02, Tax Return and Transcript Documentation RequirementsB3-3.1-02, Tax Return and Transcript Documentation Requirements.

The lender may use the Request for Verification of Employment ( Form 1005) to document employment and income. The date of the completed form must comply with B1-1-03, Allowable Age of Credit Documents and Federal Income Tax ReturnsB1-1-03, Allowable Age of Credit Documents and Federal Income Tax Returns.

The information on Form 1005 must be legible. The following fields on Form 1005 are optional:The remaining fields on the form must be completed as applicable to the borrower. 
When the borrower authorizes the lender to obtain verifications of employment and income directly from the employer, the lender must have the borrower sign Form 1005.
 

The remaining fields on the form must be completed as applicable to the borrower. 

When the borrower authorizes the lender to obtain verifications of employment and income directly from the employer, the lender must have the borrower sign Form 1005.

Alternatively, the lender may have the applicant sign a signature authorization form, which gives the lender blanket authorization to request the information it needs to evaluate the applicant’s creditworthiness.  See B1-1-02, Blanket Authorization FormB1-1-02, Blanket Authorization Form, for additional information.

The lender may receive employment and income verification directly from a third-party employment verification vendor. These verifications are acceptable as long as

• the borrower provided proper authorization for the lender to use this verification method,
• the date of the completed verification is in compliance with B1-1-03, Allowable Age of Credit Documents and Federal Income Tax ReturnsB1-1-03, Allowable Age of Credit Documents and Federal Income Tax Returns,
• the lender has determined that the vendor has made provisions to comply with reasonable quality control requests from both the lender and any subsequent mortgagee, and
• the lender understands it will be held accountable for the integrity of the information obtained from this source.

If necessary, the lender must supplement these verifications by obtaining any missing information from the borrower or their employer.

Loans that are submitted through the DU validation service must comply with all requirements pertaining to the DU validation service. See B3-2-02, DU Validation ServiceB3-2-02, DU Validation Service.