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Using Alimony/Child Support as Qualifying Income for a Home Purchase or Refinance

Answering questions from potential buyers and realtors takes up a good portion of my day. One question that came along this week concerned using alimony/child support as qualifying income. Below is a general overview of the conventional and FHA guidelines regarding the use of alimony/child support to qualify for a home loan:

Conventional

  • Must be able to document receipt of alimony/child support payments for the most recent 6 months and that you will continue to receive payments for the next 3 years.
  • Must provide one of the following: divorce decree, separation agreement, written legal agreement, court decree or documentation verifying conditions under which payments are mandated by state law.
  • Evidence that full, regular and timely payments have been received for the most recent 6 months or longer is required. Acceptable documentation includes bank statements, cancelled checks, court records, and federal tax returns.

FHA

  • Must be able to document receipt of alimony/child support payments for the most recent 12 months and that you will continue to receive payments for the next 3 years.
  • Periods less than 12 months may be acceptable, provided the lender can adequately document the payer’s ability and willingness to make timely payments. Typically, a 6 month history is still required.

If you have any questions regarding a purchase or refinance, please feel free to email me or post it in the comments section. I’m always looking for new topics for a blog post.

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