Income/employment

Question 1

Q: Can income from the sale of marijuana be used to qualify?

Answer 1

Only Fannie allows cannabis income and only when it’s a W2 borrower.

Question 2

Scenario:
client is buying an owner occ purchase, she has been a teacher for 57 years, got disabled in 1998 to 2015, then retired in 2015, started Teaching again 1-27-2020, and is salaried, can we use her salary along with her soc sec income, mahalo.

Answer 2

Since she has not been employed in 22 years, we would consider this new employment. Freddie requires 24 months, Fannie requires 12. We would not be able to use this at this at this time since it is so new :(

Question 3

Scenario
FNMA/Freddie purch
would we require 6 or 12 months on the job, since his offer letter doesn’t guarantee 40 hrs and he isn’t salaried, let me know, he is relocating here to work for the USPS,

Answer 3

we cannot use an offer letter when it is not fixed income.
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Variable hours requires a 1-2 year history. If the history is made up of more than one job then we will need at least 6 months on the current job to determine the income is stable and in line with the former earnings in the same line of work with similar pay. Anything outside of this will require a 1-2 year history on the current job

Question 4

SE question, if a client is reimbursed for a business expense is this useable as income?

Answer 4

NO reimbursements are never income for SE borrowers

Question 5

SE analysis question: Client draws above and beyond wage drawn income on a paystub, can we use that income?
If wages are on Profit and loss, what is a good thing to check to make sure those wages are clients.
What should we check?

Answer 5

1. yes but for analysis will need to support with documentation for analysis.
2. check past years returns to see what wages client is getting versus maybe employees. it has to make sense

Question 6

What do Freddie and Fannie require for Royalty income?

Answer 6

Fannie only require most recent year returns, freddie requires if over 2 years recieved to provide both years. Both require copy of contract showing payment details, Also require last 12 mo’s proof of receipt. Both require 3 year continuance proof

Question 7

What is the order of things to ask borrowers when vetting application on purch?

Answer 7

Occupancy intent, live in it, rent it out?
Property known? Short term rents allowed?
Purchase price to know if jumbo
Employment, how do you file?
Ask them about business, 100% owner? how long in biz? Covid affecting? advise on income stability these days. Bombs? unemployment/ PUA?
other props owned