Update on Self-Employed Income Analysis for Conventional Loans
Dear Licensed Partner,
Fannie Mae announcement¬†2014-16¬†clarified and updated the requirements on analysis and verification of qualifying income for self-employed borrowers.
Effective for all conventional loans submitted on or after¬†March 23, 2015, Sun West will require the following documentation when business income is reported on Schedule K1 and used for qualification:
¬† ¬† ¬† ¬†¬† o¬†Form 1065 for Partnerships/LLCs
¬† ¬† ¬† ¬†¬† o¬†Form¬†1120S for S-Corporations/LLCs¬†
B)¬†If the borrower’s ownership is 25% or greater, qualifying income from business will be calculated using the LESSER of:
Sun West Mortgage Company, Inc. will perform an analysis of borrower’s business income to determine stability and continuance.¬†
C)¬†Use of Business Asset:
Additional documentation may be required, such as several months of recent business asset statements and/or current balance sheet.
D) Income Verification for Self-Employed Co-Borrowers:
If you have any questions, please contact your Client Relations Manager at¬†(855) OK-SUNWEST¬†or¬†(855) 657-8693.
This information is provided to licensed brokers/lenders only and may not be copied or distributed to customers or potential customers. All loans are subject to approval. Certain restrictions may apply. Listed pricing is a morning indication only. Program rates, prices, guidelines, fees, costs, terms and conditions are subject to change without notice.