B3-3.4-07, Foster-Care Income (03/04/2026)

Stable or increasing: Calculate an average income amount using the most recent 12 or 24 months, based on the income history requirements above.
Decreasing: Calculate an average income amount using the most recent 12 months.

Income received from a state-or county-sponsored organization for providing temporary care for one or more children may be considered an acceptable stable income source if the following requirements are met.

Criteria	Requirements
Documentation	The lender must obtain: evidence of the payment amount(s) by using letters of verification from the state- or county-sponsored organization(s) providing the income, and receipt of income documented for the most recent 12 or 24-months, based on the income history requirement below, using sources including, but not limited to: bank statements, canceled checks, or other electronic receipt of payments.
Income History	A two-year history of providing foster-care services is expected, however, if the borrower has not received this type of income for two full years, the income may still be counted as stable income if the borrower has at least a 12-month history of providing foster-care services, and the income does not represent more than 30% of the total gross income that is used to qualify for the mortgage loan.
Income Continuance	Lenders are not required to verify continuance unless they have reason to believe the income may not continue.
Determination of Qualifying Income	Average Income: Depending on the historical trend of the income, the lender must calculate qualifying income as follows: Stable or increasing: Calculate an average income amount using the most recent 12 or 24 months, based on the income history requirements above. Decreasing: Calculate an average income amount using the most recent 12 months.