HB-1-3555
(03-09-16) SPECIAL PN 9-1
Revised (05-06-24) PN 613
CHAPTER 9: INCOME ANALYSIS
7 CFR 3555.152
9.1 INTRODUCTION
The lender is responsible to confirm applicants and households meet the eligibility
criteria for the Single Family Housing Guaranteed Loan Program (SFHGLP). Lenders
must calculate and document annual, adjusted annual, and repayment income. The
guidance provided applies to all loans, including manually underwritten loans and loans
that utilize the Agency’s automated underwriting system, GUS.
SECTION 1: ELIGIBILITY INCOME
9.2 OVERVIEW
The SFHGLP assists very-low, low, and moderate-income households. Therefore, the
lender must certify that any household that requests a loan guarantee does not exceed the
adjusted annual income threshold for the applicable state and county where the dwelling
is located. Additional information on income limits can be found in Appendix 5 of this
Handbook.
This section assists lenders in analyzing income types, completing income calculations
(annual, adjusted annual, and repayment), and documenting the income with acceptable
verifications. Documentation of income calculations are recorded on Attachment 9-B,
Worksheet for Documenting Eligible Household and Repayment Income, FNMA Form
1008 or Freddie Mac Form 1077, Uniform Underwriting and Transmittal Summary, or an
equivalent lender income worksheet. Attachment 9-C provides a case study to illustrate
how to properly complete the income worksheet. A public website is available to assist in
the calculation of annual and adjusted annual income at:
https://eligibility.sc.egov.usda.gov/eligibility/incomeEligibilityAction.do?pageAction=state.
9.3 ANNUAL INCOME [7 CFR 3555.152(b)]
Annual income includes all eligible income sources from all adult household
members, not just parties to the loan note. The annual income for the household will be
used to calculate the adjusted annual household income. The adjusted annual income
determines if the household is eligible for a guaranteed loan.
HB-1-3555
Paragraph 9.3 Annual Income
9-2
A. Income that is Never Counted
7 CFR 3555.152(b)(5) lists income sources that are never included in the annual
income calculation. Refer to Attachment 9-A to review income and asset types, guidance
for annual and repayment purposes, and documentation options acceptable to verify the
income or asset source.
B. Calculation of Annual Income
Annual income is calculated for the ensuing 12 months, based on income
verifications, documentation, and household composition. Lenders must examine all
evidence to ensure the calculation is supported.
In addition to 7 CFR 3555.152(b) and Attachment 9-A, lenders must consider the
following to calculate annual income:
• Use the gross amount, before any payroll deductions, of base wages and salaries,
overtime pay, commissions, fees, tips, bonuses, housing allowances, and other
compensations for personal services of all adult members of the household, unless
they meet the exclusion criteria of 7 CFR 3555.152(b)(5) and Attachment 9-A.
Documented cost of living allowances or wage increases that will be effective on
or before loan closing must be included in the annual income calculation.
• Include the first $480 of earned income from adult full-time students who are not
an applicant, or a spouse of an applicant.
• Include the income of an applicant’s spouse, unless the spouse has been living
apart from the applicant for at least three months (for reasons other than military
or work assignment), or court proceedings for divorce or legal separation have
been commenced. Evidence to support living apart for three months may include,
but is not limited to, an apartment lease, bills, or bank statements in their name
alone delivered to a different address, etc. This guidance applies to domestic
partners, significant others, and fiancée’s that are currently living with the
applicant as a household/family unit. This guidance does not apply to adult
dependents age 18 and up.
• An adult household member that is currently unemployed but is seeking new
employment must have their previous earnings included in annual income. The
previous earnings are not required to be included when there is documented
evidence to support they are not seeking to be reemployed, such as a tendered
resignation or official termination from previous employer, or a signed statement
HB-1-3555
Paragraph 9.3 Annual Income
(03-09-16) SPECIAL PN 9-3
Revised (05-06-24) PN 613
from the adult household member that they do not plan to pursue new employment.
• Income verifications provided by applicants that do not currently support
historical earnings with the same employer (e.g. less hours worked, less overtime,
less bonus, declining self-employment income, etc.) must be carefully reviewed to
determine appropriate calculations.
• Verified changes of income amounts or sources in the ensuing 12 months must be
documented. Examples include, but are not limited to, pending retirement,
resignation tendered, documented raise that will occur prior to loan closing, etc.
• When an income source will not be received for the entire year, the amount
anticipated to be received within the ensuing 12 months must continue to be
included in annual income unless excluded under 7 CFR 3555.152(b)(5).
Examples include, but are not limited to, child support, alimony, maintenance,
Social Security, etc. Annual income is the total of all income sources for a 12-
month timeframe. Income calculations must state the income source, the number
of months receipt remaining for the ensuing 12- month timeframe, and the total
amount to be received.
Lenders are responsible for accurately calculating annual household income. The
calculation should be logical based on the history of income and documentation provided.
Training is available on the USDA LINC Training and Resource Library website, located
at https://www.rd.usda.gov/resources/usda-linc-training-resource-library/lender-training.
Annual income calculations will typically vary from adjusted annual and repayment
income.
C. Income of Temporarily Absent Household Members
A household member is defined as all persons routinely living in the dwelling as a
principal residence, except for live in aides, foster children, and foster adults (7 CFR
3555.10). If a member of the household that will make the dwelling their principal
residence is temporarily absent, their income must be included.
D. Applicant Assets
Income earned from non-retirement assets may be required to be included in the
annual income calculation, as applicable. Refer to paragraph 9.4 for guidance.
HB-1-3555
Paragraph 9.3 Annual Income
9-4
E. Verification Requirements
Lenders must verify income and asset documentation provided by applicants and
other adult household members. Lenders will verify the income for each adult household
member for the previous 2 years. The following guidance will assist:
• Written, oral, or electronic verifications, and documents provided or prepared by
third-party sources are acceptable, unless otherwise specified. These verifications
must be provided directly to the lender.
• Lenders may not accept verifications or documents transmitted by, or passed
through, an interested third party such as builders, real estate professionals, or
sellers.
• Facsimiles, photocopies, digital images, and computer-generated documents may
be accepted in lieu of original forms, unless otherwise specified.
• The lender is responsible for the integrity and accuracy of the information in the
mortgage underwriting file. Regardless of the type of documentation used to
support the loan application, the documents must be legible and free of any
alterations, erasures, “white-outs,” or similar indications that changes have been
made.
• Verification documentation of household annual, adjusted annual, and repayment
income will be retained in the lender’s permanent case file.
• Paystubs/earning statements must include adequate information to calculate
income and include year-to-date earnings. The lender must utilize
paystub(s)/earning statement(s) that are dated no earlier than 30 days prior to the
initial loan application date.
• W-2 forms must include the most recent one or two years, as applicable. W-2’s
must clearly identify the applicant and employer.
• Tax returns for self-employed borrowers must be copies of the original returns
filed with the IRS and include all supporting schedules. Lenders may substitute
IRS transcripts obtained directly from the IRS with all supporting schedules. The
most recent tax return refers to the last return filed as determined by IRS
schedule/deadlines. Lenders must continue to obtain the most recent two years of
returns, as applicable. Applicants must not be delinquent on federal taxes as
determined by the IRS.
HB-1-3555
Paragraph 9.3 Annual Income
(03-09-16) SPECIAL PN 9-5
Revised (05-06-24) PN 613
• Applicants with an approved IRS extension for the current tax year may continue
to be eligible if they are not delinquent on taxes owed, as determined by the IRS.
Evidence of tax payments made, if applicable, must be retained in the lender’s
permanent loan file in accordance with Chapter 10 of this Handbook.
• Income and asset documents and verifications cannot be greater than 120 days old
at time of loan closing. Divorce decrees, income tax returns, and other documents
that do not expire will continue to have the most recent or filed copy accepted.
• Applicable income and asset documents greater than 120 days old at the time of loan
closing must be updated or re-verified to support applicant/household eligibility.
For all loan types, lenders must verify the income for all applicants and adult
household members (excluding eligible full- time students ages 18 and above) through
one of the following documentation methods. Refer to Attachment 9-A for
documentation and verification options that are acceptable to support income types.
1. Full Income Documentation – Non-Self-Employed
• W-2 forms for the most recent two tax years, which may be electronically
generated or provided in paper format, or IRS Wage and Income transcripts;
• Paycheck stubs or payroll earning statements that report the most recent four
weeks of earnings; and
• Prior to loan closing, a Verbal Verification of Employment (VVOE) must be
obtained for all applicants within 10 business days of loan closing. A written
verification or email confirmation (other than a paystub), that confirms the
applicant’s current employment status within this time frame is also
acceptable. The documentation must include the name and title of the person
who completed the verification for the employer. This verification will be
retained in the lender’s permanent loan file. Adverse changes to the
applicant’s employment may render the loan ineligible.
2. Alternative Income Documentation – Non-Self-Employed
• Written Verification of Employment (VOE): Electronically generated
verifications from the employer or a verification service utilized by the
employer, Form RD 1910-5, Request for Verification of Employment, or an
equivalent HUD, VA, Fannie Mae, or Freddie Mac form may be utilized to
verify the current year-to-date (YTD) and previous year’s employment
earnings. This verification must confirm base income/wages, bonus, overtime,
HB-1-3555
Paragraph 9.3 Annual Income
9-6
commissions, and other income sources earned, as applicable;
• Recent paycheck/earnings statement: Lenders must compare a recent paystub
that includes YTD earnings and employment information to the VOE to
confirm these two documents reasonably agree; and
• Prior to loan closing, a Verbal Verification of Employment (VVOE) must be
obtained for all applicants within 10 business days of loan closing. A written
verification or email confirmation (other than a paystub), that confirms the
applicant’s current employment status within this time frame is also
acceptable. The documentation must include the name and title of the person
who completed the verification for the employer. This verification will be
retained in the lender’s permanent loan file. Adverse changes to the
applicant’s employment may render the loan ineligible.
3. Self-Employed Income Documentation
Applicants or household members are considered self-employed when they have a
25 percent or greater ownership interest in a business. If the ownership interest is less
than 25 percent, neither the “Business Owner” or “Self-Employed” options should be
selected in GUS.
Federal Income Tax Returns for the business will be required when ownership is
25 percent or greater. The lender must analyze the most recent two- year history of
the business earnings. Sharp increases or decreases in self-employment income may
require the lender to review additional documentation to support their calculation of
annual, adjusted annual, and repayment income. Sharp increases or decreases are
defined as a 20 percent or greater variance for income earnings from the previous 12
months. The lender’s permanent file must contain the following, as applicable:
• Federal Income Tax Returns (filed and signed) for the most recent two
consecutive years with all schedules, or IRS transcripts that include all
applicable schedules;
• Federal Income Tax Returns for the business (filed and signed) for the most
recent two consecutive years with all schedules, or IRS transcripts that include
all applicable schedules, if required for the ownership interest/business type;
• Recent profit and loss statement (not required to be audited); and
• Confirmation the business is operational, obtained within 30 days of the loan
closing. Documentation may include evidence of a website, additional internet
HB-1-3555
Paragraph 9.3 Annual Income
(03-09-16) SPECIAL PN 9-7
Revised (05-06-24) PN 613
documentation, licensing bureau certification, etc. Adverse changes to the
business may render the applicants ineligible.
Lenders may utilize Fannie Mae Form 1084, Cash Flow Analysis, Fannie Mae
Form 1088, Comparative Income Analysis, or a comparable self-employment
evaluation form(s), and Attachment 9-E to assist in the calculation of self-
employment income.
A business (full time or part-time) that is closed may be removed from
consideration for annual income when the applicants provide a letter of explanation
and documentation to the lender which details: 1. When the business was closed; 2.
Why the business was closed; 3. How the business was closed; and 4. Evidence,
satisfactory to the lender, to support the closure of the business.
REMINDER: Refer to Attachment 9-A for documentation options and
verification requirements of additional income and asset types that may apply to the
household. If a specific income or asset type is not listed, refer to 7 CFR 3555.152.
All income and asset types must be documented and verified. The lender must retain
all documentation and calculations in their permanent loan file.
4. IRS Transcripts: Verification of Income
IRS transcripts are required for all required household members in addition
to the documentation option selected by the lender. Lenders must require each
adult household member, as applicable, to complete and sign IRS Form 4506-T,
Request for Transcript of Tax Return, or IRS Form 4506-C, IVES Request for
Transcript of Tax Return, for the previous two tax years at the time of submission to
the Agency. The 4506-T/4506-C must be used to request full transcripts with all
schedules.
Full time students ages 18 and up that are not the applicant, co-applicant, or
spouse of an applicant are not required to sign the 4506-T/4506-C or have transcripts
provided.
Guaranteed loans cannot be made to a household that exceeds the applicable
adjusted annual income limit. The transcripts provide a quality control measure to
ensure all income and asset earnings reported to the IRS have been disclosed to the
lender.
Lenders must obtain and review available transcripts prior to loan closing and
retain them in their permanent loan file.
HB-1-3555
Paragraph 9.3 Annual Income
9-8
Previously unknown/undisclosed income or asset sources that are identified by the
transcripts will require additional review by the lender and may render a loan file
ineligible.
The lender is responsible for requesting tax transcripts in the early stages of the
application process. When the lender is unable to obtain transcripts from the IRS for
the applicants or required household members, they may document their
correspondence to and from the IRS in the permanent loan file to support the
omission. The loan file will be considered complete when the explanation is
documented. Loan closings will not be delayed due to obstacles in obtaining the tax
transcripts. The lender remains responsible for obtaining transcripts, even if post-
closing.
9.4 CALCULATING INCOME FROM ASSETS [7 CFR 3555.152(d)]
Household members with cumulative net family assets (non-retirement) of $50,000 or
greater, must have those assets reviewed for annual income purposes, as indicated in 7
CFR 3555.152(d). Lenders must review the most recent asset information provided by
applicants and household members at the time of loan application. Net family assets with
actual earnings will use the stated rate of interest to calculate annual income. Net family
assets that do not earn interest will use a current passbook savings rate (verified through
the lender’s personal banking rates, online website, etc.) to calculate annual income.
If the applicants have ownership in a business, or are self-employed, the lender
should closely review the asset accounts to verify assets are not transferred between a
personal account and a business account and vice versa. These accounts should function
as two separate financial tools, one for personal transactions and one for business
transactions. In the event the assets from the business account and personal account are
co-mingled, the co-mingled assets would need to be included in the calculation of net
family assets.
Refer to the Asset section in Attachment 9-A for individual asset types and options for
documentation/verification.
9.5 ADJUSTED ANNUAL INCOME [7 CFR 3555.152(c)]
The adjusted annual income calculation will determine if the household is eligible for
the guaranteed loan program. Adjusted annual income is calculated by using the annual
income calculation and subtracting any of the eligible deductions in 7 CFR 3555.152(c)
for which the household may qualify. Attachment 9-C provides an example of using
deductions.
HB-1-3555
Paragraph 9.5 Adjusted Annual Income
(03-09-16) SPECIAL PN 9-9
Revised (05-06-24) PN 613
Refer to Attachment 9-A for information and documentation options to support these
eligible deductions:
• Dependents
• Child Care Expenses
• Elderly Household
• Care of Household Members with Disabilities
• Medical Expenses
9.6 AGENCY REVIEW OF HOUSEHOLD INCOME
The Agency will recalculate the lender’s determination of adjusted annual income, as
a quality control step, when the lender’s calculation is within 10 percent of the applicable
published income limit. The Agency review is only required for manually underwritten
loans, defined as application types that are not supported by GUS and applications
submitted to GUS that have received an underwriting recommendation of Refer or Refer
with Caution.
If the Agency’s calculation exceeds the adjusted annual income threshold, the Agency
will contact the approved lender to review the results and determine the appropriate
calculation. This review will ensure adjusted annual household income calculations are
correctly computed and include all applicable income. The Agency will complete
Attachment 9-F, Worksheet for Documenting Eligible Household and Repayment Income,
to record their calculation, which will then be uploaded to the Electronic Customer File
(ECF).
SECTION 2: REPAYMENT INCOME [7 CFR 3555.152(a)]
9.7 OVERVIEW
Repayment income will determine if applicants have sufficient income to repay the
mortgage in addition to recurring debts. Repayment income calculations often differ from
the calculation of annual and adjusted annual income.
HB-1-3555
Paragraph 9.7 Overview
9-10
Repayment income is the stable and dependable income of the applicants who will be
parties to the note. Co-signers and non-occupant co-borrowers are not permitted for a
guaranteed loan transaction.
9.8 STABLE AND DEPENDABLE INCOME [7 CFR 3555.152(a)]
7 CFR 3555.152(a) and Attachment 9-A assist lenders in reviewing income types.
The following guidance also assists lenders to consider repayment income sources:
• The income source must be documented.
• There must be evidence to support the historical receipt of earnings.
• Establish the likelihood of its continuance for at least 3 years into the mortgage.
• Analyze any gaps in employment to make a final determination of stable and
dependable income. The Agency does not impose specific criteria regarding
when a gap in employment is acceptable. It is the approved lender’s
responsibility to analyze the complete employment history to determine stable and
dependable income.
• Caution should be utilized for applicants that have documented declining wages or
earnings. Lenders must ensure repayment income is not inflated/overstated.
• Caution should be utilized for applicants that have a documented sharp increase in
earnings. A sharp increase in earnings is defined as a 20 percent or greater
variance in income from the previous 12 months. Lenders must determine if an
increase is supported and logical. Examples include, but are not limited to, a
promotion with the current employer, documented pay raise, income trend
analysis for overtime, bonus, commission, seasonal employees, etc.
• Caution should be utilized for applicants that have a documented decrease in
earnings. A documented decrease in earnings is defined as a 20 percent or greater
variance in income from the previous 12 months. Lenders must determine if the
decrease has/will continue or if there is evidence to support the earnings have
stabilized. Examples include, but are not limited to, loss of job but new
employment secured with lower wages, new profession/line of work, loss of
contract/clients, economic cycle impact such as real estate, finance/lending,
manufacturing, construction, etc.
• Lenders may gross up income that is not subject to Federal taxes 25 percent.
HB-1-3555
Paragraph 9.8 Stable and Dependable Income
(03-09-16) SPECIAL PN 9-11
Revised (09-27-23) PN 592
• Any loss incurred by a self-employed business (full time or part-time) that is
closed may be removed from consideration when the applicants provide a letter of
explanation and documentation to the lender which details: 1. When the business
was closed; 2. Why the business was closed; 3. How the business was closed; and
4. Evidence, satisfactory to the lender, to support the closure of the business.
REMINDER: Approved lenders are responsible for their underwriting decisions,
which includes the determination of stable and dependable income. Loans that default
within 60 months of the date the Loan Note Guarantee is issued may result in
indemnification from the approved lender to USDA due to unauthorized underwriting per
7 CFR 3555, HB-1-3555, and additional published USDA guidance.
9.9 AGENCY REVIEW OF REPAYMENT INCOME
The Agency will recalculate the lender’s determination of repayment income, as a
quality control step, when the repayment ratios are within 10 percent of the published
debt ratio threshold of 7 CFR 3555.151(h). The Agency review is only required for
manually underwritten loans, defined as application types that are not supported by GUS
and applications submitted to GUS that have received an underwriting recommendation
of Refer or Refer with Caution.
If the Agency’s calculation does not agree with the repayment income calculation of
the lender, the Agency will contact the approved lender to review the results and
determine the appropriate calculation. This action will strengthen the oversight
procedures to verify compliance with regulatory requirements. The Agency will complete
Attachment 9-F, Worksheet for Documenting Eligible Household and Repayment Income,
to record their calculation, which will then be uploaded to the Electronic Customer File
(ECF).
9.10 OPTIONAL DOCUMENTATION OF INCOME FORMS
Attachment 9-G of this Chapter provides optional verification forms for the lender’s
use in verifying non-employed income or adjusted annual income deductions as follows:
• Verification of Pensions and Annuities
• Verification of Student Income and Expenses
HB-1-3555
Paragraph 9.10 Optional Documentation of Income Forms
9-12
• Verification of Medical Expenses
• Verification of Social Security Benefits
• Verification of Public Assistance
• Verification of Child/Dependent Care
• Verification of Unemployment Benefits
• Verification of Business Expenses
• Verification of Support Payments
Also available is an optional form to record an oral verification of employment.
• Record of Oral Verification of Employment
9.11 EDUCATION
The Agency will allow time spent in school towards the required employment history
for repayment income This includes college, technical school, and career-based
certificates in high school (e.g. health and public safety career tracks). A standard high
school diploma without an accompanying certificate does not meet the time requirements.
HB-1-3555
Attachment 9-A
Page 1 of 30
(03-09-16) SPECIAL PN
Revised (05-06-24) PN 613
Income and Documentation Matrix
Income guidance: 7 CFR 3555, Sections 3555.152(a) and (b)
This matrix cannot cover every income/asset type, employment scenario, etc. USDA requires approved lenders
to use sound judgment to make an accurate and dependable analysis of income per 7 CFR 3555.152. Exclusions
may apply under 7 CFR 3555.152(b)(5) and Attachment 9-D.
Considerations for Income Calculations
• Lenders must verify the income for each adult household member for the previous 2 years.
• Annual and adjusted annual income calculations must include all eligible income sources from all adult
household members, not just parties to the loan note.
• Annual income is calculated for the ensuing 12 months, based on income verifications, documentation, and
household composition.
• Include only the first $480 of earned income from adult full-time students who are not the applicants, or
a spouse of an applicants in annual and adjusted annual income.
• Income from assets that meet the criteria of Section 9.4 must be included in annual and adjusted annual
income.
• Repayment income calculations include the income sources of the applicants who will be parties to the note
that meet the minimum required history identified in this matrix and have been determined to be stable and
dependable income by the approved lender.
• Income used in repayment income calculations must be confirmed to continue a minimum of three years into
the mortgage.
• If the income is tax exempt, it may be grossed up 25 percent for repayment income.
• “Documentation Source Options” lists eligible documentation. Every item listed is not required unless
otherwise stated. Lenders must obtain and maintain documentation in the loan file supporting the lender’s
income calculations.
Income Type
Annual Income
Repayment Income
Adoption Assistance
or Subsidy
If the income will be received in
the ensuing 12 months, include the
first $480 of adoption income or
subsidy assistance for each
grantee.
Required History: None, the income
must be received at the time of
submission to the Agency.
Lenders must document:
o The applicants are currently
receiving the income; and
o The amount of the income received
each month.
Benefits that do not include expiration
dates on the documentation will be
presumed to continue.
Documentation Source Options:
• Benefit/Award letter to document the amount and duration of payments.
• Online payment schedule from the Agency, bank statements, etc.
• Federal income tax returns or IRS tax transcripts with all schedules.
HB-1-3555
Attachment 9-
A
Page 2 of 30
Income Type
Annual Income
Repayment Income
Automobile Allowance
Include amounts documented on
the pay statements as taxable gross
earnings that will be received in
the ensuing 12 months.
Required History: Two years
Continuance: Income will be presumed
to continue unless there is documented
evidence the income will cease.
The full amount of the expense allowance
may be included.
Refer to Chapter 11 for additional
guidance when there is a monthly debt
associated with the income (such as a car
payment).
Documentation Source Options:
• Paystub(s)/Earning statement(s).
• Contract/agreement from employer to state terms and duration of payments.
•
Federal income tax returns or IRS tax transcripts with all schedules.
Base Wages
(Hourly or Salary)
Full or Part Time
Include amounts received before
deductions for payroll taxes,
insurance, etc. Include amounts
that will be received in the ensuing
12 months. Exclusions may apply
under 7 CFR 3555.152(b)(5).
Full time students age 18 and above
that are not applicants, co-
applicants, or a spouse of an
applicant will only have $480 of
their earnings included in the
annual income calculation. These
household members are not
required to present income
documentation.
Required History: One year
Income must be received at the time of
submission to the Agency.
The one year of required history may be
met through a combination of employers,
education, or military service. This
history is not required to be with the same
or current employer. Applicants that were
on leave with their employer due to
maternity/paternity leave, medical leave,
relocation, etc. remain employed.
Underwriters may use discretion for
applicants returning to the workforce after
leaving a previous job to care for a
child/family member, complete education,
etc. for an extended time of one year or
greater.
Documentation Source Options:
• Paystub(s)/Earning statement(s).
• W-2’s.
• Written Verification of Employment (VOE) or electronic verifications.
• Federal income tax returns or IRS tax transcripts with all schedules.
• Section 9.3E provides additional information on employment verification options.
HB-1-3555
Attachment 9-A
Page 3 of 30
(03-09-16) SPECIAL PN
Revised (09-27-23) PN 592
Income Type
Annual Income
Repayment Income
Boarder Income
Guaranteed loans are for the
purchase of a primary residence.
Boarder income refers to rental
income received from an
individual renting space inside
the dwelling, thus making the
property income producing. The
financing of income producing
property is an ineligible loan
purpose for the SFHGLP.
Ineligible
Ineligible
Bonus
Include amounts that will be
received in the ensuing 12 months
based on employment verifications.
Exclusions may apply under 7 CFR
3555.152(b)(5).
Required History: One year in the same,
or similar, line of work.
Underwriters must analyze bonus income
for the current pay period and YTD
earnings. Significant variances (increase or
decrease) of 20 percent or greater in
income from the previous 12 months must
be analyzed and documented (e.g. paid
once annually, paid monthly, etc.) before
considering the income stable and
dependable.
Continuance: Income will be presumed
to continue unless there is documented
evidence the income will cease.
Documentation Source Options:
• Paystub(s)/Earnings statement(s).
• W-2’s.
• Written VOE or electronic verifications.
• Federal income tax returns or IRS tax transcripts with all schedules.
•
Section 9.3E provides additional information on employment verification options.
Capital Gains
Include amounts that will be
received in the ensuing 12 months.
Exclusions may apply under 7
CFR 3555.152(b)(5).
Required History: Two years
Lenders must analyze the previous two
years of capital gains income. An average
of the previous two years may be logical,
or if the current year was 20 percent less
than the previous year, the lesser must be
utilized.
Required Documentation:
• Federal income tax returns or IRS transcripts with all schedules.
•
Evidence of additional property or assets retained by the applicants through title, bank statements, etc.
HB-1-3555
Attachment 9-
A
Page 4 of 30
Income Type
Annual Income
Repayment Income
Child Support
Include amounts that will be
received in the ensuing 12 months.
Exclusions may apply under 7
CFR 3555.152(b)(5).
Legally enforceable payments that
have not been received may be
excluded when payments are not
received for an extended time and a
reasonable effort has been made to
collect them through the official
entity responsible for enforcing
such payments.
Court Ordered Payments:
Required History: Six months
Child support that meets the minimum
history, but the payment amounts are not
consistent, must use an average consistent
with the payor’s current ability/willingness
to pay.
Voluntary Payment Agreements:
Required History: One year
Child support that meets the minimum
history, but the payment amounts are
not consistent, must use an average
consistent with the payor’s current
ability/willingness to pay.
Documentation Source Options:
• Final divorce decree, legal separation agreement, or court order (front and pertinent pages) to document the
amount and timeframe of the obligation.
• Evidence of timely receipt/consistent amount for required history: bank statements, canceled checks, deposit
slips, tax returns, etc.
Commission
Include amounts that will be
received in the ensuing 12 months.
Exclusions may apply under 7
CFR 3555.152(b)(5).
Required History: One year in the same,
or similar, line of work.
Underwriters must analyze commission
for the current pay period and YTD
earnings. Significant variances (increase
or decrease) of 20 percent or greater in
income from the previous 12 months must
be analyzed and documented (e.g.
variances due to seasonal/holiday, etc.)
before considering the income stable and
dependable.
Continuance: Income will be presumed
to continue unless there is documented
evidence the income will cease.
Documentation Source Options:
• Paystub(s)/Earning statement(s).
• W-2’s.
• Written VOE or electronic verifications.
• Federal income tax returns or IRS tax transcripts with all schedules.
•
Section 9.3E provides additional information on employment verification options.
HB-1-3555
Attachment 9-A
Page 5 of 30
(03-09-16) SPECIAL PN
Revised (09-27-23) PN 592
Income Type
Annual Income
Repayment Income
Contract / Employment Offer
Include amounts that will be
received in the ensuing 12 months
based on employment verifications.
Required History: One year
The one year of required history may be
met through a combination of employers,
education, or military service. This
history is not required to be with the
same or current employer.
Applicants moving to a new employer
(e.g. school district, same profession,
etc.) with a contract to begin employment
within 60 days of loan closing may be
eligible if the underwriter determines the
applicants have reserves available post
loan closing to cover all monthly liability
payments and the new mortgage
obligation until employment begins.
Documentation Source Options:
• Copy of signed employment contract/offer.
• Paystub(s)/Earning statement(s) of current/former employer to confirm employment/income history.
• W-2’s.
• Written Verification of Employment (VOE) or electronic verifications.
• Federal income tax returns or IRS tax transcripts with all schedules.
•
Section 9.3E provides additional information on employment verification options.
Depreciation/Depletion
The amount(s) of straight-line
depreciation and/or depletion
documented on acceptable IRS
forms may be deducted.
Required History: Two years
Continuance: These amounts will be
presumed to continue unless there is
documented evidence they will cease.
The amount(s) of straight-line
depreciation and/or depletion may be
added back to repayment income.
Required Documentation:
•
Federal income tax returns or IRS tax transcripts with all schedules.
HB-1-3555
Attachment 9-
A
Page 6 of 30
Income Type
Annual Income
Repayment Income
Disability Income – Long Term
This section does not refer to
disability income received from
the Social Security
Administration.
Include amounts that will be
received in the ensuing 12 months.
Exclusions may apply under 7
CFR 3555.152(b)(5).
Required History: None, the income
must be received at the time of
submission to the Agency.
Lenders must document:
o The applicants are currently
receiving the income;
o The amount of the income received
each month; and
o Determine if there is a contract
termination or modification date.
Documentation Source Options:
• Verification from the disability policy or benefits provider to document the applicant’s eligibility for
benefits, amount and frequency of payments, and termination/modification date.
• Federal income tax returns or IRS transcripts with all schedules.
Dividends
Include amounts that will be
received in the ensuing 12 months.
Exclusions may apply under 7
CFR 3555.152(b)(5).
Required History: Two years
Required Documentation:
• Account statements to support amount of income utilized for repayment purposes, including the balance, rate
of interest, and payment amounts/continuance.
• Federal income tax returns or IRS tax transcripts with all schedules.
Earned Income Tax Credit
Do not include
Do not include
Employee Fringe Benefits
Include amounts documented on the
pay statements as taxable gross
earnings that will be received in the
ensuing 12 months. Exclusions
may apply under 7 CFR
3555.152(b)(5).
Required History: One year
Employer-provided fringe benefit
packages documented on earning
statements as taxable income may be
included.
Documentation Source Options:
• Paystub(s)/Earning statement(s).
• Contract/agreement from employer to state terms and duration of payments.
• Written VOE or electronic verifications.
• Federal income tax returns or IRS tax transcripts with all schedules.
• Section 9.3E provides additional information on employment verification options.
HB-1-3555
Attachment 9-A
Page 7 of 30
(03-09-16) SPECIAL PN
Revised (09-27-23) PN 592
Income Type
Annual Income
Repayment Income
Employment Related Account
This income source may be a
non-self-employed severance
package. Lump sum retirement
packages should refer to
Retirement Income. All
payments must be deposited to
a verified asset account with
acceptable documentation of
receipt.
Include amounts that will be
received in the ensuing 12
months. Exclusions may apply
under 7 CFR 3555.152(b)(5).
Required History: None, the income
must be received at the time of submission
to the Agency.
Lenders must document:
o The applicants are currently
receiving the income;
o The amount of the income received
each month; and
o Determine if there is a contract
termination or modification date.
Required Documentation:
• Contract/agreement from employer to state terms and duration of payments.
• Benefit/Award verification letter, IRS 1099, evidence of current receipt, bank statements, etc.
•
Federal income tax returns or IRS transcripts with all schedules.
Expense Allowance
Include amounts documented on the
pay statements as taxable gross
earnings that will be received in the
ensuing 12 months. Exclusions
may apply under 7 CFR
3555.152(b)(5).
Required History: Two years
Continuance: Income will be presumed
to continue unless there is documented
evidence the income will cease.
The full amount of the expense allowance
may be included.
Refer to Chapter 11 for additional
guidance when there is a monthly debt
associated with the income.
Documentation Source Options:
• Paystub(s)/Earning statement(s).
• Contract/agreement from employer to state terms and duration of payments.
• Federal income tax returns or IRS tax transcripts with all schedules.
Foreign Income
Include all wages, salaries, and
additional income types that will be
received in the ensuing 12 months.
Exclusions may apply under 7 CFR
3555.152(b)(5).
Required History: One year (Refer to
Base Wages)
Continuance: Income will be presumed
to continue unless there is documented
evidence the income will cease.
Documentation Source Options:
• Paystub(s)/Earning statement(s), translated into English if applicable.
• Written VOE or electronic verifications.
• Federal income tax returns or IRS tax transcripts with all schedules.
•
Section 9.3E provides additional information on employment verification options.
Foster child or adult income
Do not include
Do not include
HB-1-3555
Attachment
9-
A
Page 8 of 30
Income Type
Annual Income
Repayment Income
GI Bill
This income source is paid
directly to veterans and/or their
dependents attending college or
university for the purpose of
covering tuition and related
expenses.
Do not include
Do not include
Government Benefits
Include amounts that will be
received in the ensuing 12 months.
Exclusions may apply under 7
CFR 3555.152(b)(5) and
Attachment 9-C.
Required History: None, the income must
be received at the time of submission to
the Agency.
Lenders must document:
o The applicants are currently
receiving the income; and
o The amount of the income received
each month.
Continuance: Benefits that do not
include
expiration dates on
the documentation will
be presumed to continue.
Required Documentation:
•
Benefit/Award documentation to support payment amounts and duration.
Guardianship/Conservatorship
Income
This guidance does not apply to
income earned from foster care.
Include amounts that will be
received in the ensuing 12 months.
Exclusions may apply under 7
CFR 3555.152(b)(5).
Required History: None, the income must
be received at the time of submission to
the Agency.
Lenders must document:
o The applicants are currently
receiving the income; and
o The amount of the income received
each month.
Continuance: Benefits that do not
include
expiration dates on the documentation will
be presumed to continue.
Documentation Source Options:
• Documentation to support payment amounts and duration, such as a court order, legal documents, or other
supplemental information.
• Online payment schedule from the Agency, bank statements, etc.
•
Federal income tax returns or IRS tax transcripts with all schedules.
HB-1-3555
Attachment 9-A
Page 9 of 30
(03-09-16) SPECIAL PN
Revised (09-27-23) PN 592
Income Type
Annual Income
Repayment Income
Housing or Parsonage
Allowance
Include the amounts that will be
received in the ensuing 12 months.
Exclusions may apply under 7
CFR 3555.152(b)(5).
Required History: One year
The full amount of the allowance may
be included. Do not offset the
mortgage payment with the amount of
the allowance.
Continuance: Income will be presumed
to continue unless there is documented
evidence the income will cease.
Documentation Source Options:
• Paystub(s)/Earning statement(s).
• Contract/Agreement from employer to state the terms and duration of payments.
• Federal income tax returns or IRS tax transcripts with all schedules.
Individual Retirement Account
(IRA) Distributions
Include amounts that will be
received in the ensuing 12 months.
Lump sum withdrawals or sporadic
payments may be excluded under 7
CFR 3555.152(b)(5).
Required History: None, the income must
be received at the time of submission to
the Agency.
Lenders must document:
o The applicants are currently
receiving the income; and
o The amount of income received
each month.
Continuance: Income will be presumed
to continue unless there is documented
evidence the income will cease.
Documentation Source Options:
• IRA documents, IRS 1099, evidence of current receipt, bank statements, etc.
• Federal income tax returns or IRS tax transcripts with all schedules.
Interest
Include income that will be
received in the ensuing 12 months.
Net family assets that do not exceed
a cumulative total of $50,000 are
not required to be considered in the
annual income calculation.
Required History: Two years
Required Documentation:
• Account statements to support the balance, rate of interest, and payment amounts/continuance.
• Federal income tax returns or IRS tax transcripts with all schedules.
Live in Aides
Do not include
Do not include
HB-1-3555
Attachment 9-
A
Page 10 of 30
Income Type
Annual Income
Repayment Income
Medical Reimbursement
Do not include
Do not include
Mileage
Include amounts documented on the
pay statements as taxable gross
earnings that will be received in the
ensuing 12 months.
Required History: One year
Continuance: Income will be presumed
to continue unless there is documented
evidence the income will cease.
Mileage documented on earning
statements as taxable income may be
included.
When a mileage deduction is claimed on
the income tax return, the calculated
amount may be added to repayment
income. Lenders must follow current IRS
guidance to calculate this amount.
Documentation Source Options:
• Paystub(s)/Earning statement(s).
•
Federal income tax returns or IRS tax transcripts with all schedules.
Military
Include all wages and pay
allowances that will be received in
the ensuing 12 months.
Hazardous duty pay and additional
income sources may be excluded
under 7 CFR 3555.152(b)(5).
Required History: One year
College/Technical School attendance may
be substituted.
Continuance: Income will be presumed
to continue unless there is documented
evidence the income will cease.
In addition to base pay, military personnel
may be entitled to additional forms of
pay. Income sources such as basic
allowance for housing and subsistence
(BAH/BAS), clothing allowances, flight
or hazard pay, rations, and proficiency
pay may be used for repayment income
provided it is verified to continue.
Additional consideration for the tax-
exempt nature of these payments may be
applied.
Documentation Source Options:
• Military Earnings and Leave Statement(s).
• W-2’s.
• Written VOE or electronic verifications.
• Federal income tax returns or IRS tax transcripts with all schedules.
•
Section 9.3E provides additional information on employment verification options.
HB-1-3555
Attachment 9-A
Page 11 of 30
(03-09-16) SPECIAL PN
Revised (09-27-23) PN 592
Income Type
Annual Income
Repayment Income
Mortgage Credit Certificate
Do not include
Required History: None
The monthly benefit amount may be
included in repayment income.
Self-employed applicants are not eligible
for MCC.
Required Documentation:
• Copy of the approved MCC award letter/contract with the rate of credit documented.
GUS Instructions:
• In the “Borrower Information” page under “Income from Other Sources,” use the dropdown button in the
“Income Source” field and select “Mortgage Credit Certificate.” Tab to the “Monthly Income” field and enter
the amount.
Mortgage Differential Payment
Include amounts that will be
received in the ensuing 12 months.
Exclusions may apply under 7
CFR 3555.152(b)(5).
Required History: One year
Include the differential payment in
repayment income. Do not offset the
mortgage payment with the amount of the
allowance.
Continuance: Income will be presumed
to continue unless there is documented
evidence the income will cease.
Required Documentation:
•
Verification from the employer to confirm the subsidy amount and duration of payments.
Notes Receivable
Include amounts that will be
received in the ensuing 12 months.
Exclusions may apply under 7
CFR 3555.152(b)(5).
Required History: Two years
Required Documentation:
• Copy of note to establish the amount and length of time of payment.
•
Federal income tax returns or IRS transcripts with all schedules, for proof of receipt of income.
HB-1-3555
Attachment 9-
A
Page 12 of 30
Income Type
Annual Income
Repayment Income
Overtime
Include amounts that will be
received in the ensuing 12 months
based on employment
verifications. Exclusions may
apply under 7 CFR
3555.152(b)(5).
Required History: One year in the same,
or similar, line of work.
Continuance: Income will be presumed
to continue unless there is documented
evidence the income will cease.
Underwriters must analyze overtime for
the
current pay period, and YTD earnings.
Significant variances (increase or
decrease)
of 20 percent or greater in income from the
previous 12 months must be analyzed and
documented (e.g. variances due to
seasonal/holiday, etc.) before considering
the income stable and dependable.
Documentation Source Options:
• Paystub(s)/Earning statement(s).
• W-2’s.
• Written VOE or electronic verifications.
• Federal income tax returns or IRS tax transcripts with all schedules.
• Section 9.3E provides additional information on employment verification options.
HB-1-3555
Attachment 9-A
Page 13 of 30
(03-09-16) SPECIAL PN
Revised (09-27-23) PN 592
Income Type
Annual Income
Repayment Income
Pensions
Include amounts that will be
received in the ensuing 12 months.
Lump sum withdrawals or sporadic
payments may be excluded under 7
CFR 3555.152(b)(5).
Required History: None, the income
must be received at the time of submission
to the Agency.
Lenders must document:
o The applicants are currently
receiving the income; and
o The amount of the income received
each month.
Continuance: Income will be presumed to
continue unless there is documented
evidence the income will cease.
Documentation Source Options:
• Benefit/Award verification letter, retirement documents, IRS 1099, evidence of current receipt, bank
statements, etc.
• Federal income tax returns or IRS tax transcripts with all schedules.
Per Diem
Include amounts documented on
the pay statements as taxable gross
earnings that will be received in the
ensuing 12 months. Exclusions
may apply under 7 CFR
3555.152(b)(5).
Required History: One year
Taxable income may be included.
Continuance: Income will be presumed to
continue unless there is documented
evidence the income will cease.
Documentation Source Options:
• Paystub(s)/Earning statement(s).
• Contract/agreement from employer to state terms and duration of payments.
• Federal income tax returns or IRS tax transcripts with all schedules.
HB-1-3555
Attachment 9-
A
Page 14 of 30
Income Type
Annual Income
Repayment Income
Rental Income
A retained dwelling must meet
the requirements of 7 CFR
3555.151(e).
Include positive net rental income
that will be received in the ensuing
12 months.
Negative net rental income is
counted as zero in the annual
income calculation.
Required History: Two years
Rents Received 24 Months or More
Positive net rental income received
may be included in the repayment
income.
Negative net rental income is treated as
a recurring liability in the debt ratios.
Refer to Chapter 11 for additional
guidance when there is a mortgage
liability associated with the rental
income.
Rents Received Less than 24 Months
No rental income may be included for
repayment purposes.
Negative net rental income is treated as a
recurring liability in the debt ratios.
Refer to Chapter 11 for additional
guidance when there is a mortgage
liability associated with the rental
income.
Required Documentation:
• Federal income tax returns with all schedules, specifically Schedule E; or
• IRS transcripts with all schedules, confirm Schedule E is completed.
• Evidence of cash/check deposits, money order receipts, electronic payment receipt, etc. to document rents
received for last 30 days.
• Signed lease of current occupants.
GUS Instructions:
• Complete the applicable fields in the “Real Estate” page. Include the corresponding mortgage debt
associated with the property, if applicable.
• Unless manually overwritten, GUS auto-calculates net rental income by employing a 25%
vacancy factor. GUS uses 75% of the lender entered amount for monthly rental income and
subtracts the lender entered amounts for monthly mortgage payment(s), insurance, taxes,
association dues, etc.
Restricted Stock Units (RSU)
Include amounts listed as taxable
income on the pay statements as
gross earnings that will continue to
be received in the ensuing 12
months. Exclusions may apply
under 7 CFR 3555.152(b)(5).
Required History: Two years
Required Documentation:
• RSU account statements or award letters.
•
Paystubs, VOE’s, or other documentation from the employer to support previous and future payments.
HB-1-3555
Attachment 9-A
Page 15 of 30
(03-09-16) SPECIAL PN
Revised (09-27-23) PN 592
Income Type
Annual Income
Repayment Income
Retirement
Include amounts that will be
received in the ensuing 12 months.
Lump sum withdrawals or sporadic
payments may be excluded under 7
CFR 3555.152(b)(5).
Required History: None, the income
must be received at the time of submission
to the Agency.
Lenders must document:
o The applicants are currently
receiving the income; and
o The amount of the income received
each month.
Continuance: Income will be presumed
to continue unless there is
documented evidence the income will
cease.
Documentation Source Options:
• Benefit/Award verification letter, retirement documents, IRS 1099, evidence of current receipt, bank
statements, etc.
• Federal income tax returns or IRS tax transcripts with all schedules.
Royalty Payments
Include amounts that will be
received in the ensuing 12 months.
Exclusions may apply under 7
CFR 3555.152(b)(5).
Required History: Two years
Lenders must confirm the amount,
frequency, and duration of these payments.
Required Documentation:
• Royalty contract or agreement.
•
Federal income tax returns or IRS transcripts including all schedules.
Schedule K-1
This may be utilized to document
income for applicants with less
than a 25 percent ownership of a
partnership, S corporation,
limited liability company (LLC),
ordinary income, net rental real
estate income, or other net rental
income reported on IRS Form
1065, 1120S, etc.
Include monetary amounts (cash
distributions) that will be received
in the ensuing 12 months.
Distributions of equipment, shares
of real estate interest/ownership,
non-monetary items, etc. are not
included in the annual income.
Required History: Two years
Schedule K-1 income may be utilized to
qualify applicants if the lender can
confirm the business has adequate
liquidity to support the withdrawal of
earnings. The Schedule K-1 may provide
this confirmation through “guaranteed
payments to the partner.”
Continuance: These amounts will be
presumed to continue unless there is
documented evidence they will cease.
Required Documentation:
• Federal tax returns or IRS transcripts with all schedules.
•
Schedule K-1 forms.
HB-1-3555
Attachment 9-
A
Page 16 of 30
Income Type
Annual Income
Repayment Income
Scholarships
Include funds that will be received
in the ensuing 12 months after
deducting for tuition, fees, books
and equipment.
Required History: Two years
Include remaining funds after deducting
tuition, fees, books, and equipment.
Required Documentation:
• Award letter to state the benefit/scholarship amount or tuition assistance and date of termination.
• Evidence to support the deductions required to arrive at any repayment amount.
Seasonal Employment
Include amounts that will be
received in the ensuing 12 months.
Evidence of resignation,
termination, retirement, or
relocation from these positions may
result in the exclusion of this
income.
Required History: Two years, in the
same line of work.
If the income is not earned at the time
of submission to the Agency, the
employer must provide verification that
the applicants are still an employee
along with an anticipated return to
work date.
Continuance: Income will be presumed
to continue unless there is documented
evidence the income will cease.
Documentation Source Options:
• Paystub(s)/Earning statement(s).
• W-2’s.
• Written VOE or electronic verifications.
• Federal income tax returns or IRS tax transcripts with all schedules.
• Section 9.3E provides additional information on employment verification options.
Secondary Employment
Include amounts that will be
received in the ensuing 12 months.
Evidence of resignation,
termination, retirement, or
relocation from these positions may
result in the exclusion of this
income.
Required History: One year of working
primary and secondary employment
concurrently.
Continuance: Income will be presumed
to continue unless there is documented
evidence the income will cease.
Documentation Source Options:
• Paystub(s)/Earning statement(s).
• W-2’s.
• Written VOE or electronic verifications.
• Federal income tax returns or IRS tax transcripts with all schedules.
•
Section 9.3E provides additional information on employment verification options.
HB-1-3555
Attachment 9-A
Page 17 of 30
(03-09-16) SPECIAL PN
Revised (05-06-24) PN 613
Income Type
Annual Income
Repayment Income
Section 8 Housing Vouchers
Do not include
Required History: None
The amount of the benefit payment may
be included in repayment income.
When the benefit is paid directly to the
servicer, the amount of the benefit may
be considered as a reduction of the PITI,
rather than an addition to repayment
income. A manual file submission is
required in this instance.
Required Documentation:
• Benefit/Award letter to verify the subsidy amount.
• When used as a reduction of the PITI, documentation verifying the benefit is paid directly to the servicer must
be maintained in the lender’s permanent loan file.
GUS Instructions:
• Enter the amount on the “Borrower Information” page under “Income from Other Sources.” Use the
dropdown button in the “Income Source” field and select “Housing Choice Voucher Program.” Tab to the
“Monthly Income” field and enter the amount.
Self-Employment Income and
Independent Contractors (1099)
Lenders must analyze Federal tax
returns to determine the appropriate
gross income calculations.
Include zero in annual income for a
business loss.
Required History: Two years
Lenders must analyze Federal tax
returns to determine the appropriate
gross income.
Depreciation, depletion, business use
of home, and other paper deductions
may be allowed to be added back to
the net profit/loss. Lenders may refer
to Fannie Mae Form 1084 or
comparable self-employment analysis
form for assistance.
A business loss must be deducted from
repayment income.
Required Documentation:
• Most recent two years of Federal income tax returns or IRS tax transcripts with all schedules; and
• YTD Profit and Loss Statement (audited or unaudited), used for income trend analysis.
HB-1-3555
Attachment 9-
A
Page 18 of 30
Income Type
Annual Income
Repayment Income
Separate Maintenance/Alimony
Include amounts that will be
received in the ensuing 12 months.
Legally enforceable payments that
have not been received may be
excluded when payments are not
received for an extended period of
time and a reasonable effort has
been made to collect them through
the official entity responsible for
enforcing such payments.
Court Ordered Payments:
Required History: Six months
Maintenance that meets the minimum
history, but the payment amounts are
not consistent must use an average that
is consistent with the payor’s current
ability/willingness to pay.
Voluntary Payment Agreements:
Required History: One year
Maintenance that meets the minimum
history, but the payment amounts are
not consistent must use an average that
is consistent with the payor’s current
ability/willingness to pay.
Required Documentation:
• Final divorce decree, legal separation agreement, or court order (front and pertinent pages) to document the
amount and timeframe of the obligation.
• Evidence of timely receipt and consistent amount for required history: bank statements, canceled checks,
deposit slips, tax returns, etc.
Social Security Income
Include amounts that will be
received in the ensuing 12 months.
Exclusions may apply under 7
CFR 3555.152(b)(5).
Required History: None, the income
must be received at the time of
submission to the Agency.
Benefits that do not include an
expiration date and are expected to be
received for at least three years into the
mortgage may be considered.
Benefits received by applicants on
behalf of minors (funds are intended
for their support) may be utilized for
repayment income if they are
expected to be received for at least three
years into the mortgage.
Benefits received by applicants on behalf
of an adult household member may be
used for repayment income if they are
expected to be received for at least three
years into the mortgage when there is
evidence they are the legal guardian for
the non-applicant adult
household member.
Documentation Source Options:
• Benefit statement from the Social Security Office or Form SSA-1099/1042S, Social Security Benefit
Statement.
•
Legal guardianship/payee status for adult household members.
HB-1-3555
Attachment 9-A
Page 19 of 30
(03-09-16) SPECIAL PN
Revised (09-27-23) PN 592
Income Type
Annual Income
Repayment Income
Student Loans
Do not include
Do not include
Supplemental Nutrition
Assistance Program (SNAP)
Do not include
Do not include
Temporary Leave
Income/Temporary Reduction
to Income with current
employer
This guidance is for applicants
that are currently employed. This
guidance does not apply to
applicants that are currently
unemployed.
Include amounts that will be
received in the ensuing 12 months.
Exclusions may apply under 7
CFR 3555.152(a)(5).
Required History: None, the income
must be received at the time of loan
closing.
The lender must obtain all the
following from the employer:
o Verification the applicants have the
right to return to work following the
leave;
o Documentation of the
applicant’s return date;
o Verification of the duration and
amount of temporary leave income;
and
o Documentation of regular
employment prior to temporary leave.
Applicants that will return to work prior
to the first mortgage payment may use
their pre-leave income.
Applicants that will not return to work
prior to the first mortgage payment must
use their current income received (which
may be zero) plus non-retirement liquid
reserves. Reserves must meet the
required history and calculations in the
Asset and Reserves section of this
matrix. The total of income and assets
must meet the mortgage obligation and
additional monthly liability payments
until the applicant’s date of return to
work.
Lenders must document their calculation
of income plus reserves divided by
applicable months on Attachment 9-B,
the Uniform Underwriting and
Transmittal Summary, or on an alternate
underwriting form.
Documentation Source Options:
• All employer verifications required by this section.
• Benefit statement/Contract.
• Paystub(s)/Earning statement(s).
• Written VOE or electronic verification.
•
Section 9.3E provides additional information on employment verification options.
HB-1-3555
Attachment 9-
A
Page 20 of 30
Income Type
Annual Income
Repayment Income
Tips
Include amounts that will be
received in the ensuing 12 months.
Exclusions may apply under 7
CFR 3555.152(b)(5).
Required History: One year
Underwriters must analyze tip income for
the current pay period, and YTD
earnings. Significant variances (increase
or decrease) of 20 percent or greater in
income from the previous 12 months
must be analyzed and documented (e.g.
variances due to seasonal/holiday/etc.)
before considering the income stable and
dependable.
Continuance: Income will be presumed
to continue unless there is
documented evidence the income will
cease.
Documentation Source Options:
• Paystub(s)/Earning statement(s).
• W-2’s.
• Written VOE or electronic verifications.
• Federal income tax returns or IRS tax transcripts with all schedules.
• Section 9.3E provides additional information on employment verification options.
Trust Income
Include amounts that will be
received in the ensuing 12 months.
Exclusions may apply under 7
CFR 3555.152(b)(5).
Required History: Six months
Required Documentation:
• Trust documents: legally filed or recognized to document the balance, monthly payments, term of payments,
mode of payment delivery (revocable or irrevocable), etc.
•
Documentation to support payments received: bank statements, deposit slips, trust account statements, etc.
Unemployment
Include amounts that will be
received in the ensuing 12 months.
Benefits received while seeking
new full/part time employment that
have ended are excluded under 7
CFR 3555.152(b)(5)(v).
Required History: Two years
Continuance: Income will be presumed
to continue unless there is documented
evidence the income will cease.
Applicants with a sole source of
unemployment income are ineligible for
a guaranteed loan.
Documentation Source Options:
• Evidence of compensation: IRS Form 1099 or equivalent.
•
Federal income tax returns or IRS tax transcripts with all schedules.
HB-1-3555
Attachment 9-A
Page 21 of 30
(03-09-16) SPECIAL PN
Revised (05-06-24) PN 613
Income Type
Annual Income
Repayment Income
Unreimbursed Employee or
Business Expenses
The total amount of unreimbursed
expenses may be deducted from
annual and adjusted annual income.
Required History: None
The amount(s) of unreimbursed employee
or business expenses deducted from the
annual income must also be deducted from
repayment income.
Documentation Source Options:
• IRS Form 2106, Schedule A, Schedule C, or equivalent IRS filed form.
• Federal income tax returns or IRS tax transcripts with all schedules.
VA Benefits
Include amounts that will be
received in the ensuing 12 months.
Exclusions may apply under 7
CFR 3555.152(b)(5).
Required History: None, the income must
be received at the time of submission to the
Agency.
Lenders must document:
o Applicants are currently receiving
the income; and
o The amount of the income received
each month
Benefits with no expiration date stated
will be presumed to continue.
Benefits received by applicants on behalf
of minors (funds are intended for their
support) may be utilized for repayment
income.
Benefits received by applicants on behalf
of an adult household member may be
used for repayment income when there is
evidence they are the legal guardian for
the non-applicant adult household
member.
Documentation Source Options:
• Benefit statement from the Office of Veteran’s Affairs.
• Legal guardianship/payee status for adult household members.
HB-1-3555
Attachment 9-
A
Page 22 of 30
Income Type
Annual Income
Repayment Income
Variable Income (e.g. piece rate,
union work, and other similar
types of pay structures)
Include amounts that will be
received in the ensuing 12 months.
Exclusions may apply under 7 CFR
3555.152(b)(5).
Required History: One year, in the same
or similar line of work.
Underwriters must analyze variable
income earnings for the current pay
period and YTD earnings. Significant
variances (increase or decrease) of 20
percent or greater in income from the
previous 12 months must be analyzed and
documented (e.g. variances due to
seasonal/holiday, etc.) before considering
the income stable and dependable.
Continuance: Income will be presumed
to continue unless there is documented
evidence the income will cease.
Required Documentation:
• Paystub(s)/Earning statement(s).
• W-2’s.
• Written VOE or electronic verifications.
• Federal income tax returns or IRS tax transcripts with all schedules.
•
Section 9.3E provides additional information on employment verification options.
Worker’s Compensation
Include amounts that will be
received in the ensuing 12 months.
Lump sums or sporadic payments
may be excluded under 7 CFR
3555.152(b)(5).
Required History: Six months
.
Required Documentation:
• Award letter or settlement to state amount and duration of payments.
• Earnings statements/Paystubs.
•
Written VOE from employer.
HB-1-3555
Attachment 9-A
Page 23 of 30
(03-09-16) SPECIAL PN
Revised (05-06-24) PN 613
Adjusted Annual Income Deductions
7 CFR 3555.152(c)
Dependent Deduction [7 CFR 3555.152(c)(1)]:
• $480 deduction per eligible dependent at the time of submission to the Agency.
• Applicants with shared custody may include their child(ren).
Documentation Source Options:
• Certify to the household number on Form RD 3555-21.
• List all household members in GUS and Attachment 9-B, the lender’s Uniform Underwriting Transmittal
Summary (FNMA Form 1008/Freddie Mac Form 1077), or equivalent.
Child Care Expenses [7 CFR 3555.152(c)(2)]:
• Care for children age 12 and under.
• Care is necessary to enable a family member to work, seek employment, or attend school.
• Calculate anticipated child care expenses for the ensuing 12 months.
• Applicants that have not placed their child into care or have no evidence to support payments, deposits, or
registration fees are ineligible for this deduction.
• Child care expenses that exceed the earnings of the family member enabled to work are not permissible
for deduction.
Documentation Source Options:
• Utilize income tax returns, receipts, or third- party verifications provided by a licensed childcare facility or
provider on letterhead that 1. Identifies the child enrolled; 2. Date of enrollment; 3. Payment due; and 4.
Payment history.
• Relatives or non-licensed private individuals who provide care must also provide evidence of payments
made (e.g. canceled checks, money order receipts, bank statements, etc.).
• Child support payments and school tuition are not eligible deductions.
• Attachment 9-G is an available option to document childcare expenses, but may not be used alone when
additional documentation is required per this section to verify payment (i.e. relatives and private
individuals).
• Calculations must be recorded on Attachment 9-B, the lender’s Uniform Underwriting Transmittal Summary
(FNMA Form 1008/Freddie Mac Form 1077), or equivalent.
Disability Expenses [7 CFR 3555.152(c)(3)]:
• Deduction for eligible expenses that exceed three percent of the annual income.
• Eligible expenses: 1. Allow the disabled individual or another household member to work; 2. Are non-
reimbursable by insurance or other sources; and 3. Do not exceed the income earned by the person who is
working due to the care provided.
• Examples include but are not limited to daily living assistance, wheelchairs, ramps, adaption needs,
workplace equipment, etc.
• Utilize documentation to estimate anticipated annual expenses.
Documentation Source Options:
• Third party verifications for caregivers/agencies for the dates, costs, and fees.
• Receipts, itemized income tax returns, and other evidence to support the deductions.
• Calculations must be recorded on Attachment 9-B, the lender’s Uniform Underwriting Transmittal Summary
(FNMA Form 1008/Freddie Mac Form 1077), or equivalent.
HB-1-3555
Attachment 9-
A
Page 24 of 30
Adjusted Annual Income Deductions
7 CFR 3555.152(c)
Elderly Household Deduction [7 CFR 3555.152(c)(4)]:
• Applicants age 62 or older.
•
One $400 deduction allowed per household.
Documentation Source Options:
• Certify to date of birth on the loan application.
Medical Expenses [7 CFR 3555.152(c)(5)] (Elderly and Disabled Households Only):
• Deduction for eligible expenses that exceed 3 percent of the annual income for entire family.
• Definition of elderly family is in 7 CFR 3555.10.
• Utilize documentation to estimate anticipated annual expenses.
Documentation Source Options:
• Itemized tax return documents.
• Receipts for insurance premiums, prescriptions, dental and eye exams, eyeglasses, medical/health products
or apparatus, hearing aids, visiting or live in care providers, etc.
• Calculations must be recorded on Attachment 9-B, or lender’s Uniform Underwriting Transmittal Summary
(FNMA Form 1008/Freddie Mac Form 1077), or equivalent.
HB-1-3555
Attachment 9-A
Page 25 of 30
(03-09-16) SPECIAL PN
Revised (05-06-24) PN 613
Assets and Reserves
7 CFR 3555.152(d)
Cash Reserves calculated by the system represent the amount of liquid assets that remain available to the
applicants/borrowers after loan closing (includes amounts received at closing). Lenders must use caution and not
overstate assets utilized for reserves.
Although all household assets must be verified and documented in the permanent loan file, the lender may
underwrite to the most conservative approach with no consideration of assets entered into GUS.
When assets are entered into GUS and used as reserves, lenders must ensure that the funds will be available to the
applicants post-closing.
Unverified funds are not an acceptable source of funds for down payment, closing costs, etc.
USDA does not require evidence from all parties to access joint or business accounts unless access to the funds are
restricted without it.
Bridge Loan
Documentation:
• Evidence of loan proceeds, where they are held (depository account, etc.), and balance remaining.
• Confirm corresponding liability for this debt is included in the total debt ratio if applicable.
Reserves: Eligible
Funds to Close: Eligible
Business Accounts
Documentation:
• Two months of recent bank statements; or
• Verification of Deposit (VOD) and a recent bank statement (official electronic printout of monthly statement
is acceptable).
Reserves: Eligible
• Lenders must use the balance as reflected on the most current bank statement, or on the verification
of deposit if the date on the verification of deposit is dated after the bank statement (online
transaction printouts, registers or lists are not permitted in lieu of bank statements).
Funds to Close: Eligible
GUS Instructions:
• Enter as Asset Type “Other” in the “Other Assets You Have” section and select either “Other Liquid Asset”
or “Other Non-Liquid Asset.”
Cash on Hand
Documentation:
• Applicants must supply a letter of explanation to state how the funds were accumulated (how
much weekly/monthly/etc.).
• Lender must determine reasonableness of accumulation based on income stream, spending habits, etc.
Reserves: Ineligible
Funds to Close:
Eligible
HB-1-3555
Attachment 9-A
Page 26 of 30
Assets and Reserves
Certificate of Deposit (CD)
Documentation:
• Recent account statement (monthly, quarterly, etc.) to evidence the account balance and early withdrawal
penalty, if applicable.
Reserves: Eligible
• Lenders may use the current vested balance, minus applicable fees/penalties.
Funds to Close: Eligible
Depository Accounts: Checking, Money Market Accounts, and Savings
Documentation:
• Two months of recent bank statements; or
• Verification of Deposit (VOD) and a recent bank statement (official electronic printout of monthly statement
is acceptable).
• Investigate all recurring deposits on the account statements that are not attributed to wages or earnings
to confirm the deposits are not from undisclosed income sources. There is no tolerance or percentage
of the amount of a recurring deposit that is not required to be investigated.
• Investigate individual (non-recurring) deposits greater than $1,000 on the account statements that are
not attributed to wages or earnings to confirm the deposits are not from undisclosed income sources.
• If the source of a deposit is readily identifiable on the account statement(s), such as a direct deposit
from an employer, the Social Security Administration, an IRS or state income tax refund, or a transfer
of funds between verified accounts, and the source of the deposit is printed on the statement, the lender
does not need to obtain further explanation or documentation. However, if the source of the deposit is
printed on the statement, but the lender still has questions as to the source of the deposit, the lender
should obtain additional documentation.
Reserves: Eligible
• Lenders must use the ending balance as reflected on the most current bank statement, or on the
verification of deposit if the date on the verification of deposit is dated after the bank statement.
Lenders may also opt for a more conservative approach and use a lower figure at their discretion.
Electronic printouts are not permitted, unless they are the official electronic statements provided by
the banking institution. Deposited gift funds require further documentation and calculation. Refer to
the “Gift Funds” section of this Attachment for further guidance.
Funds to Close: Eligible
• In addition to the documentation requirements above, electronic printouts are permitted to verify cash to close.
Earnest Money
Documentation:
• Retain a copy of the check, money order receipt, etc. that was remitted for the earnest money.
Reserves: Eligible
Funds to Close: Eligible
GUS Instructions:
• Earnest money that has cleared an applicant’s depository account may be entered under the “Other Credits”
section of the “Lender Loan Information” GUS application page. The amount of earnest money should not be
reflected in the balance of any asset entered on the “Assets and Liabilities” application page.
• Refer to the “Gift Funds” section of this Attachment for additional guidance when gift funds are used for the
Earnest Money deposit.
HB-1-3555
Attachment 9-
A
Page 27 of 30
(03-09-16) SPECIAL PN
Revised (05-06-24) PN 613
Assets and Reserves
Foreign Assets (Assets located outside of the United States and its territories)
Documentation:
• Documentation verifying assets have been exchanged to U.S. dollars and held in a Federal or State regulated
financial institution prior to closing.
•
Lender must verify funds availability and accompanying documentation that has been converted to English, or
provide a translation attached to each document, and ensure the translation is complete and accurate.
Reserves: Eligible
Funds to Close: Eligible
Gift of Equity, Sweat Equity, or Rent Credits
Documentation:
• These gifts or credits must be applied as a reduction to the purchase price of the dwelling.
• Ensure the appraiser is aware of the gift and/or credit. This will allow them to properly complete the
appraisal report, note the reduction, and support the appraised value compared to purchase price, if
applicable.
• The borrower may not receive cash back at loan closing for these gifts and/or credits.
Reserves: Ineligible
Funds to Close: Ineligible
Gift Funds
Documentation:
• Gift funds are considered the applicant’s own funds, therefore excess gift funds are eligible to be returned to
the applicant at loan closing.
• Gift funds may not be contributed from any source that has an interest in the sale of the property (seller,
builder, real estate agent, etc.).
• Cash on hand is not an acceptable source of donor gift funds.
• A gift letter must be obtained to specify the donor, the dollar amount of the gift, and include a statement that
the funds do not have to be repaid.
• The lender must verify that sufficient funds to cover the gift have been transferred to the applicant’s account,
or will be documented as received by the closing agent at the time of closing. Acceptable documentation
includes:
o Evidence of the applicant’s deposit;
o A copy of the donor’s funds by check/electronic transfer to the closing agent; or
o A copy of the Closing Disclosure showing receipt of the donor’s funds.
Reserves: Ineligible
Funds to Close: Eligible
GUS Instructions:
• Gift funds should be entered in the “Gifts or Grants You Have Been Given or Will Receive for This Loan”
section of the “Loan and Property Information” GUS application page. If the funds have already been
deposited into an asset account, select “deposited” and include the amount of the gift in the applicable asset
account on the “Assets and Liabilities” GUS application page. If the funds have not been deposited into an
asset account, select “not deposited” and do not include the gift in an asset account on the “Assets and
Liabilities” GUS application page.
• Gift funds applied as Earnest Money should not be reflected in the “Gifts or Grants You Have Been Given or
Will Receive for This Loan” section of the “Loan and Property Information” GUS application page.
HB-1-3555
Attachment 9-A
Page 28 of 30
Assets and Reserves
Individual Development Account (IDA)
Documentation:
• Two months of account statements; or
• Verification of Deposit (VOD); or
• Alternate evidence provided by the account trustee/management to support account activity and monthly
balances.
• Verification must document the vested/amount available for withdrawal without penalty or reimbursement.
Reserves: Eligible
• Lenders must use the lesser of the current vested balance or the previous month’s ending vested balance.
Funds to Close: Eligible
Life Insurance
Documentation:
• Document the applicant’s receipt of funds from the policy.
• Verify where the proceeds are held and confirm they are available to the applicants.
• Confirm corresponding liability for this debt in the total debt ratio, if applicable.
Reserves: Eligible
Funds to Close: Eligible
Lump Sum Additions: IRS Refunds, Lottery Winnings, Inheritances, Withdrawals from Retirement Accounts
Documentation:
• Document the applicant’s receipt of funds.
• Verify where the proceeds are held and confirm they are available to the applicants.
• One-time deposits may not require annual income consideration under 7 CFR 3555.152(b)(5)(vi).
• Do not enter into GUS separately if it is already included in the borrower’s depository account.
Reserves: Eligible
Funds to Close: Eligible
Personal Property Sold
Documentation:
• Document the applicant’s ownership of the asset.
• Evidence of the transfer of ownership of the asset through a bill of sale or statement from the purchaser.
• Receipt of sales proceeds through deposit slips, bank statements, or a copy of the purchasing party’s
canceled check, money order, or electronic funds transfer.
Reserves: Eligible
Funds to Close: Eligible
HB-1-3555
Attachment 9-A
Page 29 of 30
(03-09-16) SPECIAL PN
Revised (09-27-23) PN 592
Assets and Reserves
Retirement: 401(k), IRA, etc.
Documentation:
• Recent account statement (monthly, quarterly, etc.) to evidence the account balance, vested balance available
for withdrawal, and early withdrawal penalty, if applicable.
• Funds borrowed against these accounts may be used for funds to close but are not considered in reserves.
The borrowed funds should not be reflected in the balance of any asset entered on the “Assets and
Liabilities” application page.
Reserves: Eligible
• 60 percent of the vested amount available to the applicants may be used as reserves.
• Funds borrowed against these accounts are not eligible for reserves. The borrowed funds should not be
reflected in the balance of any asset entered on the “Assets and Liabilities” application page.
Funds to Close:
Eligible
Sales Proceeds: Real Estate Owned
Documentation:
• Closing disclosure or acceptable alternative.
• Verify where the proceeds are held and confirm they are available to the applicants.
Reserves: Eligible
• Reserves will be calculated based on the data entered in the “Assets and Liabilities” and “Real Estate”
application pages in GUS. Lenders must confirm the GUS calculation. An override of the data entry, or
other asset data entry for this purpose, must have supporting documentation.
• Net equity/sales proceeds manually entered on a loan application must have supporting documentation.
Funds to Close: Eligible
Secured Loan from Personal Asset
Documentation:
• Document the amount of the secured loan proceeds and the source (e.g. Certificate of Deposit, stocks, etc.).
• Confirm corresponding liability for this debt is included in the total debt ratio, if applicable.
• This guidance does not apply to funds borrowed from an applicant’s retirement account (e.g. 401(k), IRA,
etc.). Please review the “Retirement” section of this matrix for guidance on these types of accounts.
Reserves: Eligible
Funds to Close: Eligible
Stocks, Stock Options, Bonds, Mutual Funds, and Investments
Documentation:
• Recent account statement (monthly, quarterly, etc.) to evidence the account balance, vested balance available
for withdrawal, and early withdrawal penalty, if applicable.
Reserves: Eligible
Funds to Close: Eligible
Trust Accounts
Documentation:
• Verify applicants have access to the funds, amounts, circumstances, requirement to repay withdrawal, etc.
• Recent account/trust statement (monthly, quarterly, etc.) to evidence the account balance.
Reserves: Eligible
Funds to Close: Eligible
HB-1-3555
Attachment 9-
A
Page 30 of 30
Assets and Reserves
Unsecured Loan: Borrowed Funds
Documentation:
• Document the amount of the loan proceeds and the source (e.g. signature loan, line of credit, credit card
advance/loan, overdraft protection, etc.).
• Confirm corresponding liability for this debt is included in the total debt ratio, if applicable.
Reserves: Ineligible
Funds to Close: Ineligible
ASSET CHANGES AFTER CONDITIONAL COMMITMENT ISSUANCE
Assets verified prior to loan closing that are less than the amounts entered into GUS or on the loan application may
retain the issued Conditional Commitment (Form RD 3555-18/18E) when one the following are met:
1. The application was approved with zero months of cash reserves; or
2. The application will continue to have a minimum of four months of cash reserves.
HB-1-3555
Attachment 9-B
Page 1 of 3
Applicant: Co Applicant:
WORKSHEET FOR DOCUMENTING ELIGIBLE HOUSEHOLD AND REPAYMENT INCOME
Identify all Household Members
Age
Full-time
Student Y/N?
Disabled
Y/N?
Receive
Income Y/N?
Source of Income
ANNUAL INCOME CALCULATION
(Consider anticipated income for the next 12 months for all adult household members as described in 7 CFR 3555.152(b)
and HB-1-3555, Chapter 9. Website for instructions: https://www.rd.usda.gov/resources/directives
)
1.
Applicant
(Wages, salary, self-employed, commission, overtime, bonus, tips, alimony, child support, pension/retirement, social
security, disability,
trust income, etc.). Calculate and record how the calculation of each income source/type was determined in the space below.
2. Co-Applicant (Wages, salary, self-employed, commission, overtime, bonus, tips, alimony, child support, pension/retirement, social security,
disability, trust income, etc.) Calculate and record how the calculation of each income source/type was determined in the space below.
3. Additional Income to Primary Income
(Automobile Allowance, Mortgage Differential, Military, Secondary Employment, Seasonal
Employment, Unemployment, etc.). Calculate and record how the calculation of each income source/type was determined in the space below.
4. Additional Adult Household Member (s) who are not a party to the note (Primary Employment from Wages, Salary, Self- Employed,
Additional Income to Primary Employment, Other Income, etc.). Calculate and record how the calculation of each income source/type was
determined in the space below.
5. Income from Assets (Income from household assets as described in HB-1-3555, Chapter 9). Calculate and record how the calculation of each
income source/type was determined in the space below.
6.
Annual Household Income
(Total 1 through 5)
(03-09-16) SPECIAL PN
Revised (01-09-23) PN 573
Lender Instructions: Determine eligible household income for the Single-Family Housing Guaranteed Loan Program (SFHGLP) by
documenting all sources/types of income for all household members. Qualify the loan by documenting all sources/types of income that is
stable and dependable, utilized to repay the loan.
HB-1-3555
Attachment 9-
B
Page 2 of 3
Applicant: Co Applicant:
7. Dependent Deduction
($480 for each child under age 18, full-time student, or disabled family member over the age of 18) - # x
$480
8. Annual Child Care Expenses (Reasonable expenses for children 12 and under) Calculate and record the calculation of the deduction in the
space below.
9. Elderly/Disabled Household
(1 household deduction of $400 if 62 years of age or older, or disabled and a party to the note)
10. Disability (Unreimbursed expenses in excess of 3% of annual income per 7 CFR 3555.152(c) and HB-1-3555 Chapter 9)
Calculate and record the calculation of the deduction in the space below.
11. Medical Expenses (Elderly/Disabled households only. Unreimbursed medical expenses in excess of 3% of annual income per 7 CFR 3555.152(c)
and HB-1-3555 Chapter 9) Calculate and record the calculation of the deduction in the space below.
12
.
Total Household Deductions (Total 7 through 11)
ADJUSTED ANNUAL INCOME CALCULATION (Consider qualifying deductions as described in 7 CFR 3555.152(c) and HB-1-3555 Chapter 9)
County:
State:
Moderate Income Limit:
13. Adjusted Annual Income
(Item 6 minus item 12)
Income cannot exceed Moderate Income Limit to be eligible for SFHGLP
HB-1-3555
Attachment 9-B
Page 3 of 3
(03-09-16) SPECIAL PN
Revised (01-09-23) PN 573
Applicant: ______________________________________________ Co Applicant: ______________________________________________
14. Stable Dependable Monthly Income (Parties to note only). Calculate and record how the calculation of each income source/type was determined in
the space below. Identify income type by party to note.
Applicant
Co-Applicant
Total
Base Income
Calculation of Base Income:
Calculation of Base Income:
Other Income
Calculation of Other Income:
Calculation of Other Income:
Total Income
15. Monthly Repayment Income (Total of 14)
MONTHLY REPAYMENT INCOME CALCULATION (Consider stable and dependable income of parties to the note as described in 7
CFR 3555.152(a) and HB
‐1‐3555 Chapter 9. Non-occupant borrowers or co-signers are not allowed.)
Preparer’s Signature:
Name (Print):
Title:
Date: ___________________
HB-1-3555
Attachment 9-C
Page 1 of 5
(03-09-16) SPECIAL PN
Revised (09-27-23) PN 592
ATTACHMENT 9-C
EXAMPLE CASE STUDY
Household members:
Name
Relationship
Comments
Household Income, Assets, and Expenses
David
Example
Applicant
Age: 40
Employed, party to note
$1,250/week wages;
Savings account balance $41,400 (APY .5)
Checking account balance $3,500
Betsy Example
Applicant
Age: 40
Employed, party to note
$15.50/hr wages – working 20 hours week
$100/month child support from ex-husband
(Kathy’s father)
Cynthia
Example
David’s mother
Age: 67
Disabled, moved in when
husband died, not a party to the
note
$800/month Social Security benefits
Savings account balance $3,800 (APY .045)
Checking account balance $1,400
Janet Smith
Daughter
Age: 19
Full-time college student, part-
time employed, not a party to
the note
$600/month wages
Kathy Smith
Daughter
Age: 14
Full-time junior-high school
student, part-time employed,
not a party to the note
$9.00/hour x 8 hours per week x 4 weeks =
$288 monthly earnings
Chris Doe
Foster child
Age: 8
Full-time elementary student,
not a party to the note
County pays household $800/month to care for
foster child. The family pays $50 per week/$200
per month for after school child care.
Eligible Household Income: Calculate annual and adjusted annual income to determine eligibility of the household for the
SFHGLP. For Annual Income Calculation – Consider income of all household members:
• Count David’s wages • Count Betsy’s wages • Count child support
(Betsy)
• Count only the first
$480 of Janet’s wages
(Household member is
greater than 18 years
of age but is a full-
time student)
• Do not count Kathy’s
wages (Household
member is a minor
and less than 18 years
of age)
• Count Cynthia’s Social
Security
• Count actual income
from assets from all
members of the
household if they total
$50,000 or more.
• Do not count payments for
Care of foster child
• Passbook rate is .03
HB-1-3555
Attachment 9-C
Page 2 of 5
Adjusted Annual Income Calculation:
Dependent Deduction
• Three dependent deductions are permitted for Kathy (a minor), Janet (an adult full-time student, who is not the head of
household or spouse), and Cynthia (an adult individual with disabilities, who is not the head of household or spouse).
• A foster child is not a permanent household member, and therefore is not an eligible dependent.
• Total household members that meet the Household member definition in 7 CFR 3555.10 are David, Betsey,
Cynthia, Janet, and Kathy.
• A deduction of $1,440 in this example may be deducted ($480 for each eligible dependent x 3 = $1,440). Dependents are
Kathy, Janet, and Cynthia.
Child Care Deduction
• Child care expenses are permitted for the care of a foster child but must not exceed the amount earned by the family
member enabled to work.
• Child care expenses are not permitted if another adult household member is available to care for the child. In this example, it
is assumed there are no adult household members available to care for the child.
• Since the cost of child care does not exceed an adult household member’s monthly earnings, the full amount of the child care may
be deducted.
Elderly or Disabled Household Deduction
• Cynthia, a household member, is 67. But she is not an applicant on the loan, therefore no elderly family deduction is allowed.
Medical Expense Deduction
• Family medical expenses cannot be deducted since this is not an elderly or disabled household as defined in 7 CFR 3555.152(c).
Disability Assistance Expenses
• No disability assistance expenses were claimed. To be allowed a deduction, the expenses would have to be necessary to enable
a family member to work.
Repayment Income: Calculate the income utilized to repay the loan. Consider only income from parties to the note
that is determined to be stable and dependable per 7 CFR 3555.152(a).
David and Betsy are parties to the note. David has worked the last two years earning $1,250 per week or $65,000 annually. Betsy
has made $15.50/hour and worked 20 hours per week for the past five years consistently. Betsy receives child support for Kathy, paid
through the court at $100 a month, or $1,200 annually. She has received support consistently for the past three years. Kathy is 14.
David and Betsy have cared for foster children for the past three years. Chris Doe is 8 years of age. The county pays $800.00 per
month, or $9,600 annually to the household to care for the foster child. Foster care is not a source of income that is eligible for
repayment income.
• David: $65,000 historical employment income divided by 12 = $5,416.67
• Betsy: $16,120 historical employment income divided by 12 = $1,343.33
• Betsy: $1,200 historical child support income divided by 12 = $100.00 [3-year continuance since Kathy is 14]
• Total stable and dependable income in accordance with 7 CFR 3555.152(a) = $6,860.00/month
HB-1-3555
Attachment 9-C
Page 3 of 5
(03-09-16) SPECIAL PN
Revised (09-27-23) PN 592
ATTACHMENT 9-C
EXAMPLE CASE STUDY:
Applicant: David Example Co Applicant: Betsy Example
WORKSHEET FOR DOCUMENTING ELIGIBLE HOUSEHOLD AND REPAYMENT INCOME
Identify all Household Members
Age
Full-time
Student Y/N?
Disabled
Y/N?
Receive
Income Y/N?
Source of Income
David Example
40
N
N
Y
XYZ Employment
Betsy Example
40
N
N
Y
123 Employment,
child support
Cynthia Example
67
N
Y
Y
Social Security
Janet Smith
19
Y
N
Y
PT Employment
Kathy Smith
14
Y
N
Y
PT Employment
Chris Doe
8
Y
N
Y
Foster care income
ANNUAL INCOME CALCULATION
(Consider anticipated income for the next 12 months for all adult household members as described in 7 CFR 3555.152(b)
and HB-1-3555 Chapter 9. Website for instructions: https://www.rd.usda.gov/resources/directives
)
1.
Applicant (Wages, salary, self-employed, commission, overtime, bonus, tips, alimony, child support, pension/retirement, social
security,
disability, trust income, etc.) Calculate and record how the calculation of each income source/type was determined in the space below.
David - $1,250/wk x 52 = $65,000
$65,000.00
2. Co-Applicant (Wages, salary, self-employed, commission, overtime, bonus, tips, alimony, child support, pension/retirement, social security,
disability, trust income, etc.) Calculate and record how the calculation of each income source/type was determined in the space below.
Betsy - $15.50/hr x 20 hrs/wk x 52 = $16,120
Betsy – child support - $100 x 12 = $1,200
$17,320.00
3. Additional Income to Primary Income
(Automobile Allowance, Mortgage Differential, Military, Secondary Employment, Seasonal
Employment, Unemployment, etc.) Calculate and record how the calculation of each income source/type was determined in the space
below.
$0
4.
Additional Adult Household Member (s) who are not a party to the note (Primary Employment from Wages, Salary, Self-
Employed, Additional income to Primary Employment, Other Income). Calculate and record how the calculation of each income
source/type was determined in the space below.
Cynthia- $800/month x 12 = $9,600
Janet = first $480 must be counted as full-time student over 18 years of age
$10,080.00
5. Income from Assets (Income from household assets, if total exceeds $50,000, as described in HB-1-3555, Chapter 9). Calculate and record how
the calculation of each income source/type was determined in the space below.
Total assets=$50,100
David: Savings $41400x.005=$207, Checking: 3500x.003(passbook rate)=$10.50
Cynthia: Savings $3800x.0045=$17.10, Checking: $1400x.003=$4.20
$238.80
6.
Annual Household Income
(Total 1 through 5)
$92,638
Lender Instructions: Determine eligible household income for the Single-Family Housing Guaranteed Loan Program (SFHGLP) by
documenting all sources/types of income for all household members. Qualify the loan by documenting all sources/type of income that is
stable and dependable utilized to repay the loan.
HB-1-3555
Attachment 9-
C
Page 4 of 5
Applicant: David Example Co Applicant: Betsy Example
7. Dependent Deduction ($480 for each child under age 18, full-time student, or disabled family member over the age of 18) - # 3 x
$480
$1,440.00
8. Annual Child Care Expenses (Reasonable expenses for children 12 and under) Calculate and record the calculation of the deduction
in the space below.
$50/week x 52 weeks/year = $2,600
$2,600.00
9. Elderly/Disabled Household
(1 household deduction of $400 if 62 years of age or older, or disabled and a party to the note)
$0
10. Disability (Unreimbursed expenses in excess of 3% of annual income per 7 CFR 3555.152(c) and HB-1-3555 Chapter 9)
Calculate and record the calculation of the deduction in the space below.
$0
11. Medical Expenses (Elderly/Disabled households only. Unreimbursed medical expenses in excess of 3% of annual income per
7 CFR 3555.152(c) and HB-1-3555 Chapter 9.) Calculate and record the calculation of the deduction in the space below.
$0
12.
Total Household Deductions (Total 7
through 11)
$4,040.00
ADJUSTED ANNUAL INCOME CALCULATION (Consider qualifying deductions as described in 7 CFR 3555.152(c) and HB-1-3555 Chapter 9)
$88,598.80
County: Washington
Oklahoma
State:
Moderate Income Limit: $121,300
13. Adjusted Annual Income (Item 6 minus item 12)
Income cannot exceed Moderate Income Limit to be eligible for SFHGLP
HB-1-3555
Attachment 9-C
Page 5 of 5
(03-09-16) SPECIAL PN
Revised (09-27-23) PN 592
Applicant: David Example Co Applicant: Betsy Example
14. Stable Dependable Monthly Income (Parties to note only). Calculate and record how the calculation of each income source/type was
determined in the space below. Identify income type by party to note.
Applicant
Co-Applicant
Total
Base Income
$5,416.67
Calculation of Base Income:
David: $65,000 / 12 = $5,416.67
$1,343.33
Calculation of Base Income:
Betsy: $16,120 /12 = $1,343.33
$6,760.00
Other Income
Calculation of Other Income:
$100.00
Calculation of Other Income:
Betsy: Child Support: $1,200 / 12 = $100.00
[3 year continuance confirmed: Kathy is 14]
$100.00
Total Income
$5,416.67
$1,443.33
$6,860.00
15. Monthly Repayment Income (Total of 14)
$6,860.00
MONTHLY REPAYMENT INCOME CALCULATION (Consider stable and dependable income of parties to the note as described in 7
CFR 3555.152(a) and HB
‐1‐3555 Chapter 9. Non-occupant borrowers or co-signers are not allowed.)
Preparer’s Signature: [Signature]
Name (Print): [Name]
Title: [Title]
Date: [Date]
HB-1-3555
Attachment 9-D
Page 1 of 4
ATTACHMENT 9-D
ANNUAL INCOME
SOURCES OF INCOME WHICH BY FEDERAL STATUTE ARE EXCLUDED FROM
ANNUAL INCOME
The following sources, subject to exemption by Federal statute, are never considered when
calculating annual income.
Any revenue which a Federal statute exempts shall not be considered income or used as a
basis for determining eligibility for an Agency loan, payment assistance, or denying or reducing
Federal financial assistance or benefits to which the recipient would otherwise be entitled.
Additional financial assistance, which is considered exempt income under Federal statutes,
includes:
1. The imminent danger duty-pay to a service person applicant or spouse away from home
and exposed to hostile fire. Amounts of imminent danger pay for military personnel
stationed in the Combat Zone are excluded from annual income effective August 2, 1990.
Any military pay received by persons serving in the Combat Zone received on or after
January 17, 1991, is excluded from annual income. The Combat Zone, as defined by the
Presidential Executive Order 12744 dated January 21, 1991, consists of the Persian Gulf,
the Red Sea, the Gulf of Oman, that portion of the Arabian Sea that lies north of 10
degrees north latitude and west of 68 degrees east longitude, the Gulf of Aden, the total
land areas of Iraq, Kuwait, Saudi Arabia, Oman, Bahrain, Qatar, and the United Arab
Emirates. Immediately upon notification by the family or based on information from a
knowledgeable source that a member of the household was serving in the Combat Zone,
the Loan Approval Official shall re- determine the household income retroactive to
January 17, 1991, and adjust the applicant’s payment assistance accordingly.
2. Payments and assets, including for supportive services and reimbursement of out-of-
pocket expenses, for volunteers under the Domestic Volunteer Service Act of 1973,
including, but not limited to:
a. National Volunteer Antipoverty Programs, which include Volunteers in Service to
America (VISTA), Peace Corps, Service Learning Programs, and Special Volunteer
Programs.
(03-09-16) SPECIAL PN
Revised (05-06-24) PN
613
HB-1-3555
Attachment 9-D
Page 2 of 4
b. National Older American Volunteer Programs for persons age 60 and over who include
Retired Senior Volunteer Programs, Foster Grandparent Program, Older American
Community Services Program, and National Volunteer Programs to Assist Small
Business and Promote Volunteer Service to Persons with Business Experience, Service
Corps of Retired Executives (SCORE), and Active Corps of Executives (ACE).
3. Allowances, earnings, and payments to individuals participating in programs under the
Workforce Investment Act of 1998 reauthorized as the Workforce Innovation and
Opportunity Act of 2014.
4. Allowances, earnings, and payments to AmeriCorps participants under the National and
Community Service Act of 1990.
5. Payments and assets received after January 1, 1989, from the Agent Orange Settlement
Fund or any other fund established pursuant to the settlement in the "In Re Agent
Orange Product Liability Litigation”, M.D.L. No. 381 (E.D.N.Y.).
6. Payments and assets received under the "Alaska Native Claims Settlement Act" or
the "Maine Indian Claims Settlement Act”. Additionally, lump sum or periodic
payments received by an individual Indian pursuant to the Class Action Settlement
Agreement in the case entitled Elouise Cobell et al. v. Ken Salazar et al., for a
period of one year from the time of receipt of that payment as provided in the
Claims Resolution Act of 2010. This exclusion also applies to assets.
7. Income and assets derived from certain sub-marginal land of the United States that is
held in trust for certain American Indian tribes.
8. Payments and assets received by the Indian Claims Commission to the Confederated
Tribes and Bands of the Yakima Indian Nation or the Apache Tribe of the Mescalero
Reservation.
9. Payments, funds, or distributions authorized, established, or directed by the Seneca
Nation Settlement Act of 1990. This exclusion also applies to assets.
10. Assistance payments or allowances made under the Department of Health and Human
Services Low- Income Home Energy Assistance Program.
11. Assistance received under the Richard B. Russell School Lunch Act, and the Child
Nutrition Act of 1966, including reduced-price lunches and food under the Special
Supplemental Food Program for Women, Infants, and Children (WIC).
12. Payments received from the Job Training Partnership Act.
13. Income and assets derived from the disposition of funds of the Grand River Band
of Ottawa Indians.
HB-1-3555
Attachment 9-D
Page 3 of 4
(03-09-16) SPECIAL PN
Revised (05-06-24) PN
613
14. The first $2,000 of per capita shares received from judgment funds awarded by the
National Indian Gaming Commission or the U.S. Claims Court, the interests of
individual Indians in trust or restricted lands, and the first $2,000 per year of income
received by individual Indians from funds derived from interests held in such trust or
restricted lands. This exclusion does not include proceeds of gaming operations regulated
by the Commission. This exclusion also applies to assets.
15. Payments received from programs funded under Title V of the Older Americans Act of
1965.
16. Payments from any deferred U.S. Department of Veterans Affairs disability benefits
that are received in a lump sum amount or in prospective monthly amounts.
17. Amounts of student financial assistance funded under title IV of the Higher Education
Act of 1965, including awards under Federal work-study programs or under the
Bureau of Indian Affairs student assistance programs.
18. The amount of any refund (or advance payment with respect to a refundable credit)
issued under the Internal Revenue Code is excluded from income and assets for a
period of 12 months from receipt.
19. Any allowance paid to children of Vietnam veterans born with spina bifida, children of
women Vietnam veterans born with certain birth defects, and children of certain
Korean and Thailand service veterans born with spina bifida is excluded from income
and assets.
20. Any amount of crime victim compensation and assets that provides medical or other
assistance (or payment or reimbursement of the cost of such assistance) under the
Victims of Crime Act of 1984 received through a crime victim assistance program,
unless the total amount of assistance that the applicant receives from all such programs
is sufficient to fully compensate the applicant for losses suffered as a result of the
crime.
21. Any amounts in an “individual development account” are excluded from assets and
any assistance, benefit, or amounts earned by or provided to the individual
development account are excluded from income, as provided by the Assets for
Independence Act.
22. Federal assistance for a major disaster or emergency received by individuals and
families under the Robert T. Stafford Disaster Relief and Emergency Assistance Act
and comparable disaster assistance provided by States, local governments, and disaster
assistance organizations. This exclusion also applies to assets.
HB-1-3555
Attachment 9-D
Page 4 of 4
23. Any amount in an Achieving Better Life Experience (ABLE) account, distributions
from and certain contributions to an ABLE account established under the ABLE Act
of 2014.
24. The value of any child care assistance provided or arranged (or any amount received
as payment for such care or reimbursement for costs incurred for such care) under the
Child Care and Development Block Grant Act of 1990.
25. Assistance and assets received by a household under the Emergency Rental Assistance
Program pursuant to the Consolidated Appropriations Act, 2021 and the American
Rescue Plan Act of 2021.
26. Any other income which is exempted under Federal statute.
HB-1-3555
Attachment 9-E
Page 1 of 3
ATTACHMENT 9-E
INFORMATION FOR ANALYZING TAX RETURNS
FOR SELF-EMPLOYED APPLICANTS
Self-employed applicants must submit current documentation of the business’ income and
expenses, including any applicable Federal tax returns that were filed with the IRS for the most
recent two years in addition to year-to-date profit and loss and balance statements. Lenders are
encouraged to use Fannie Mae Form 1084, Cash Flow Analysis, and Fannie Mae Form 1088,
Comparative Income Analysis, to document a trend analysis for the applicant’s business. Lenders
may use the Fannie Mae forms or any documentation that provides the same information.
Regardless of the analysis method used, and the documentation prepared by the lender, the loan
file must contain clear and sufficient support for the lender’s decision regarding the viability of
the business and loan approval.
A. Individual Tax Returns (IRS Form 1040)
The amount shown on the IRS Form 1040 as “adjusted gross income” must be either
increased or decreased based on the lender’s analysis of the individual tax returns and any
related tax schedules. Particular attention must be paid to:
•
Wages, salaries, tips. If an amount is shown here, this may indicate the individual is
a salaried employee of a corporation or has other sources of income. It may also
indicate the spouse is employed, in which case the income must be subtracted from
the adjusted gross income in the analysis.
•
Business income or loss (from Schedule C). The sole proprietorship income
calculated on Schedule C is business income. Depreciation or depletion may be added
back to adjusted gross income.
•
Rents, royalties, partnerships, etc. (from Schedule E). Any income received from
rental properties or royalties may be used as income after adding back any
depreciation shown on Schedule E.
•
Capital gain or loss (from Schedule D). This is generally a one-time transaction and
should not be considered in determining repayment income. However, if the business
has a constant turnover of assets resulting in gains or losses, the capital gain or loss
may be considered in determining the income provided the applicants have at least
two years’ tax returns evidencing capital gains. An example would include an
individual who purchases old houses, remodels them, and sells them for a profit.
•
Interest and dividend income (from Schedule B). This income, both taxable and
tax- exempt, may be added back to the adjusted gross income only if it has been
received for the past two years and is expected to continue. If the interest-bearing
asset will be liquidated as a source of the cash investment, the lender must adjust
accordingly.
HB-1-3555
Attachment 9-
E
Page 2 of 3
•
Farm income or loss (from Schedule F). Any depreciation shown on Schedule F
may be added back to the adjusted gross income.
•
IRA distributions, pensions and annuities, and social security benefits. The non-
taxable portion of these items may be added back to the adjusted gross income if the
income is expected to continue for the first three years of the mortgage.
•
Adjustments to income. Certain adjustments to income shown on the IRS Form
1040 may be added back to the adjusted gross income. Among these are IRA and
Keogh retirement deductions, penalties on early withdrawal of savings, health
insurance deductions, and alimony payments.
•
Employee business expenses. These are actual cash expenses that must be deducted
from the applicant’s adjusted gross income, if applicable.
B. U.S. Corporate Income Tax Returns (IRS Form 1120)
Corporations are state chartered businesses owned by their stockholders. Compensation
to its officers, generally in proportion to the percentage of ownership, is shown on the
corporate tax returns and will appear on individual tax returns. If the applicant’s percentage
of ownership is not shown, it must be separately obtained from the corporation’s accountant
with evidence the applicants have the right to those funds. Once the adjusted business income
is determined, it is to be multiplied by the applicant’s percentage of ownership in the
business.
In analyzing the corporate tax returns, lenders must adjust for the following:
•
Depreciation and depletion. The corporation’s depreciation and depletion must be
added back to after-tax income.
•
Taxable income. This is the corporation’s net income before federal taxes. It must be
reduced by the tax liability.
•
Fiscal year versus calendar year. If the corporation operates on a fiscal year that is
different from the calendar year, an adjustment must be made by the lender to relate
corporate income to the individual tax return.
•
Cash withdrawals. The applicant’s withdrawal of cash from the corporation may
have a severe negative impact on the corporation’s ability to continue operating.
C. “S” Corporation Tax Returns
An “S” corporation is generally a small, start-up business, with gains and losses passed
onto stockholders in proportion to each stockholder’s percentage of business ownership. The
income for the owners comes from W-2 wages and is taxed at the individual rate.
The “compensation of officers” line on the IRS Form 1120-S is transferred to the
applicant’s IRS Form 1040. Both depreciation and depletion may be added back to income in
HB-1-3555
Attachment 9-E
Page 3 of 3
(03-09-16) SPECIAL PN
Revised (09-27-23) PN 592
proportion to the applicant’s share of income. However, income must also be deducted
proportionately by the total obligations payable by the corporation in less than one year. The
applicant’s withdrawal of cash from the corporation may have a severe negative impact on
the corporation’s ability to continue operating which must be considered in the analysis.
D. Partnership Tax Returns
A partnership is formed when two or more individuals form a business and share in
profits, losses, and responsibility for running the company. Each partnership pays taxes on
his or her proportionate share of the partnership income.
Both general and limited partnerships report income on the IRS Form 1065, U.S. Return
of Partnership Income, which must be reviewed by the lender to assess the viability of the
business. The partner’s share of income is carried over to Schedule E of IRS Form 1040.
Both depreciation and depletion may be added back to income in proportion to the
applicant’s share of income. However, income must also be deducted proportionately by the
total obligations payable by the partnership in less than one year. The applicant’s withdrawal
of cash from the partnership may have a severe negative impact on the partnership’s ability
to continue operating that must be considered in the analysis.
E. LLC Corporation Tax Returns
A limited liability corporation (LLC) can be formed by one or more individuals. Only
Massachusetts and the District of Columbia require two or more individuals. Owners in an
LLC are referred to as members. A member of an LLC normally has at risk, only his or her
share of capital paid into the business. Members are not personally liable for the debts of the
LLC. There are three ways in which an LLC is taxed:
•
Single-owner LLC. LLC owners are taxed on business profits each year on their
individual income tax returns. The IRS treats the LLC as a sole proprietorship. Profits
are reported on Schedule C of an individual 1040 tax return.
•
LLCs. The IRS treats the LLC as a partnership. The LLC prepares and files IRS
Form 1065, U.S. Return of Partnership Income, each year. LLC profits are allocated
to each of the owners according to the profit-sharing arrangement set up in the LLC
operating agreement. Each owner is given a Schedule K-1, which shows each owner’s
share of LLC income. The owner then reports and pays taxes on this income on the
owner’s 1040 income tax return.
•
Check-the-Box Corporate Tax Treatment. Under these rules, any eligible business
can elect to be taxed as a corporation by filing IRS Form 8832, Entity Classification
Election, and checking the corporate income tax treatment box on the form. After
making this election, profits kept in the business are taxed at the separate income tax
rates that apply to corporations.
HB-1-3555
Attachment 9-F
Page 1 of 2
ATTACHMENT 9-F
WORKSHEET FOR DOCUMENTING ELIGIBLE
HOUSEHOLD AND REPAYMENT INCOME
[AGENCY USE ONLY]
GENERAL INFORMATION
Applicant(s):
GLS Borrower ID:
Lender:
AGENCY WRITTEN ANALYSIS DOCUMENTING ELIGIBLE HOUSEHOLD INCOME
Consider anticipated income for the next 12 months for all adult household members as described in 7 CFR §3555.152(b). Consider
qualifying deductions as described in 7 CFR 3555.152(c). Website for instructions/technical handbook/notices:
https://www.rd.usda.gov/resources/directives.
Calculate and record how the calculation of each income source/type and deduction was determined in the space below.
I have reviewed the lender’s calculation and compared it to income verifications. I agree with the lender’s
calculation of eligible household income.
$
By:
Date:
(Title)
(03-09-16) SPECIAL PN
Revised (01-09-23) PN 573
Agency Instructions: Recalculate income in the circumstances noted below. Retain this worksheet as part of the permanent SFHGLP
file, when applicable. If the reviewer agrees with the lender’s income calculation, check the box indicating agreement with the lender’s
calculation; otherwise complete the recalculation of income in the space provided.
Eligible Household Income: Recalculate the lender’s determination of eligible income if the lender’s adjusted annual income calculation
is within 10 percent of the applicable published income limit for manually underwritten loans. The published income limits may be found
at the public website: http://eligibility.sc.egov.usda.gov/eligibility/
Repayment Income: Recalculate the lender’s determination of repayment income for manually underwritten loans if the lender’s
repayment ratios are within 10 percent of the published debt ratio limit found at §7 CFR 3555.151(h).
Definition - Manually Underwritten Loan Files: 1) Loans submitted by lenders that are not supported by the automated underwriting
system, GUS. 2) Loans submitted to GUS, that have received an underwriting recommendation of Refer or Refer With Caution. Accept
and Accept with Full Documentation loans are not manually underwritten loans.
HB-1-3555
Attachment 9-F
Page 2 of 2
Applicant(s):
GLS Borrower ID:
Lender:
By:
Date:
(Title)
AGENCY WRITTEN ANALYSIS MONTHLY REPAYMENT INCOME
Consider the stable and dependable income of parties to the note as described in 7 CFR 3555.152(a). Website for
instructions/technical handbook/notices: https://www.rd.usda.gov/resources/directives.
Calculate and record how the calculation of each income source/type and deduction was determined in the space below.
I have reviewed the lender’s calculation and compared it to income verifications. I agree with the lender’s
calculation of stable, dependable repayment income.
(03-09-16) SPECIAL PN
HB-1-3555
Attachment 9-G
Page 1 of 10
ATTACHMENT 9-G
OPTIONAL VERIFICATION OF INCOME FORMS
VERIFICATION OF PENSIONS AND ANNUITIES
REQUEST FOR INFORMATION
APPLICANT IDENTIFICATION
Name Social Security Number
REQUESTED INFORMATION
A. INCOME FROM ANNUITIES
1. $ Current monthly gross amount received. Will the applicant continue to receive this
monthly amount for the next twelve months? Yes No If, no please explain.
2. Describe any deductions from the gross amount that are taken.
B. VERIFICATION OF ASSETS
1. $ Current market value of assets held in the retirement or pension plan.
2. Can the applicants withdraw amounts from the retirement account without retiring or terminating
employment? Yes No. If yes, explain the terms of the withdrawal, including any
penalties.
3. Can the applicants borrow against amounts in the retirement account? Yes No
If yes, explain the terms (maximum amount, interest rate, repayment term, purposes, etc.)
LENDER CERTIFICATION: Verifier must print their name, address and telephone number and certify to
the accuracy of information recorded by executing below.
Name: Title:
Telephone Number:
(Signature)
WARNING: Knowingly and willingly making a false or fraudulent statement to any department of the United
States Government is a felony punishable by fine and imprisonment (Title 18, Section 1001, U.S. Code)
HB-1-3555
Attachment 9-
G
Page 2 of 10
(03-09-16) SPECIAL PN
VERIFICATION OF STUDENT INCOME AND EXPENSES
REQUEST FOR INFORMATION
APPLICANT IDENTIFICATION
Name Social Security Number
REQUESTED INFORMATION
1. Describe any financial assistance the above-reference student receives.
Amount Source Purpose for Which Funds May Be Used
2. Describe any expenses the above-referenced student has for:
$ Tuition
$ Housing
$ Books
$ Supplies and Equipment
$ Transportation
$ Misc. Personal Expenses
$ Total
LENDER CERTIFICATION: Verifier must print their name, address and telephone number and certify to
the accuracy of information recorded by executing below.
Name: Title:
Telephone Number:
(Signature)
WARNING: Knowingly and willingly making a false or fraudulent statement to any department of the
United States Government is a felony punishable by fine and imprisonment (Title 18, Section 1001, U.S.
Code)
(03-09-16) SPECIAL PN
HB-1-3555
Attachment 9-G
Page 3 of 10
VERIFICATION OF MEDICAL EXPENSES
REQUEST FOR INFORMATION
APPLICANT IDENTIFICATION
Name Social Security Number
REQUESTED INFORMATION
1. Please list the purpose of any accumulated medical bills, identify to whom the amount is owed, and provide the
amount to be paid during the coming 12 months.
Amount Owed To Medical Expenses for
2. Medical Insurance Premiums
$ Amount Paid Payment Period: per month, per year
Medical Insurance Premiums
$ Amount Paid Payment period: per month, per year
3. List other anticipated medical expenses
LENDER CERTIFICATION: Verifier must print their name, address and telephone number and certify to the
accuracy of information recorded by executing below.
Name: Title:
Telephone Number:
(Signature)
WARNING: Knowingly and willingly making a false or fraudulent statement to any department of the United
States Government is a felony punishable by fine and imprisonment (Title 18, Section 1001, U.S. Code)
HB-1-3555
Attachment 9-
G
Page 4 of 10
(03-09-16) SPECIAL PN
VERIFICATION OF SOCIAL SECURITY BENEFITS
REQUEST FOR INFORMATION
APPLICANT IDENTIFICATION
Name Social Security Number
REQUESTED INFORMATION
Social Security Data
Date of Birth
Gross Monthly Social Security Benefit Amount, Type of Benefit
_________________ Gross Monthly Supplemental Security Income Payment Amount (including State
Supplement) Type of Benefit
Amount of Monthly Deductions for Medicare Paid by the Applicants
LENDER CERTIFICATION: Verifier must print their name, address and telephone number and certify to the
accuracy of information recorded by executing below.
Name: Title:
Telephone Number:
(Signature)
WARNING: Knowingly and willingly making a false or fraudulent statement to any department of the United
States Government is a felony punishable by fine and imprisonment (Title 18, Section 1001, U.S. Code)
(03-09-16) SPECIAL PN
HB-1-3555
Attachment 9-G
Page 5 of 10
VERIFICATION OF PUBLIC ASSISTANCE
REQUEST FOR INFORMATION
APPLICANT IDENTIFICATION
Name Social Security Number
REQUESTED INFORMATION
Number in Family: Rate Per Month
Aid to Families with Dependent Children $
General Assistance $
Does this amount include Court Awarded Support Payments Yes No
Amount Specifically Designated for Shelter and Utilities $
Other Assistance - Type: $
Total Monthly Grant $
Other Income - Source: $
*Maximum Allowance for Rent and Utilities $
Amount of Public Assistance given during the past 12 months $
LENDER CERTIFICATION: Verifier must print their name, address and telephone number and certify to the
accuracy of information recorded by executing below.
Name: Title:
Telephone Number:
(Signature)
WARNING: Knowingly and willingly making a false or fraudulent statement to any department of the United
States Government is a felony punishable by fine and imprisonment (Title 18, Section 1001, U.S. Code)
HB-1-3555
Attachment 9-
G
Page 6 of 10
(03-09-16) SPECIAL PN
VERIFICATION OF CHILD/DEPENDENT CARE
REQUEST FOR INFORMATION
APPLICANT IDENTIFICATION
Name Social Security Number
REQUESTED INFORMATION
Name of Person or Agency Providing Care:
Address:
Name(s) of person or Persons Cared for:
Specify Hours and Days of Care.
Average Amount Paid for Care: $ Week Month
Estimated Amount to be Paid in coming 12 months (including full-time summer care of school children, if
applicable): $
Will any amount of this expense be reimbursed by an outside source: Yes No
LENDER CERTIFICATION: Verifier must print their name, address and telephone number and certify to the
accuracy of information recorded by executing below.
Name: Title:
Telephone Number:
(Signature)
WARNING: Knowingly and willingly making a false or fraudulent statement to any department of the United
States Government is a felony punishable by fine and imprisonment (Title 18, Section 1001, U.S. Code)
(03-09-16) SPECIAL PN
HB-1-3555
Attachment 9-G
Page 7 of 10
VERIFICATION OF UNEMPLOYMENT BENEFITS
REQUEST FOR INFORMATION
APPLICANT IDENTIFICATION
Name Social Security Number
REQUESTED INFORMATION
1. Are benefits being paid now? Yes No
2. If yes, what is Gross Weekly payment? $
3. Date of Initial Payment
4. Duration of Benefits weeks
Is claimant eligible for future benefits? Yes No
5. If yes, how many weeks?
6. If no, what is termination date of benefits?
LENDER CERTIFICATION: Verifier must print their name, address and telephone number and certify to the
accuracy of information recorded by executing below.
Name: Title:
Telephone Number:
(Signature)
WARNING: Knowingly and willingly making a false or fraudulent statement to any department of the United
States Government is a felony punishable by fine and imprisonment (Title 18, Section 1001, U.S. Code)
HB-1-3555
Attachment 9-
G
Page 8 of 10
(03-09-16) SPECIAL PN
VERIFICATION OF BUSINESS EXPENSES
REQUEST FOR INFORMATION
APPLICANT IDENTIFICATION
Name Social Security Number
REQUESTED INFORMATION
Based on business transacted during 20 , to 20
1. Gross Income $
2. Expenses:
(a) Interest on Loans $
b) Cost of Goods/Materials $
(c) Rent $
(d) Utilities $
(e) Wages/Salaries $
(f) Employee Contributions $
(g) Federal Withholding Tax $
(h) State Withholding Tax $
(i) FICA $
(j) Sales Tax $
(k) Other $
(l) Straight Line Depreciation $
Total Expenses $
3. Net Income $
LENDER CERTIFICATION: Verifier must print their name, address and telephone number and certify to the
accuracy of information recorded by executing below.
Name: Title:
Telephone Number:
(Signature)
WARNING: Knowingly and willingly making a false or fraudulent statement to any department of the United
States Government is a felony punishable by fine and imprisonment (Title 18, Section 1001, U.S. Code)
HB-1-3555
Attachment 9-G
Page 9 of 10
VERIFICATION OF SUPPORT PAYMENTS
REQUEST FOR INFORMATION
APPLICANT IDENTIFICATION
Name
Social Security Number
REQUESTED INFORMATION
Name of Person Paying Support:
Address:
For ( ) Former Spouse
( ) Children
Children Names are:
Amount of Support $ Week, Month, Year
LENDER CERTIFICATION: Verifier must print their name, address and telephone number and certify to the
accuracy of information recorded by executing below.
Name: Title:
Telephone Number:
(Signature)
WARNING: Knowingly and willingly making a false or fraudulent statement to any department of the United
States Government is a felony punishable by fine and imprisonment (Title 18, Section 1001, U.S. Code)
(03-09-16) SPECIAL PN
HB-1-3555
Attachment 9-
G
Page 10 of 10
(03-09-16) SPECIAL PN
RECORD OF ORAL VERIFICATION OF EMPLOYMENT
APPLICANT INFORMATION Applicant
Name of Applicant/Co-Applicant:
Co-Applicant
EMPLOYMENT INFORMATION VERIFIED Present Previous Employment
Company:
Name and Title of Person Contacted:
Telephone Number:
Date:
Source of Telephone Number:
Date of Employment: Position:
Probability of Continued Employment:
Salary:
Probability of continued bonus and/or overtime is likely to continue:
ADDITIONAL INFORMATION VERIFIED
Signature of Person Receiving Verification
Date and Time
WARNING: Knowingly and willingly making a false or fraudulent statement to any department of the United
States Government is a felony punishable by fine and imprisonment (Title 18, Section 1001, U.S. Code)
