CRU Income & Employment Verification

Question 1

For a salaried borrower, how many years of W-2s does Fannie Mae typically require to document employment income?

Accepted Answer

Two years

Answer

One year

Answer

Three years

Answer

Five years

Question 2

A borrower has been self-employed for 18 months. Under standard agency guidelines, how is this income typically treated?

Accepted Answer

It cannot be used until the borrower has a two-year self-employment history

Answer

It may be used if supported by 12 months of bank statements

Answer

It is averaged over the 18 months of tax returns available

Answer

It is fully acceptable with a signed CPA letter confirming stability

Question 3

Which document is the primary tool used by underwriters to verify a borrower's year-to-date earnings from an employer?

Accepted Answer

Pay stub

Answer

1040 tax return

Answer

VOE (Verification of Employment)

Answer

Bank statement

Question 4

When calculating qualifying income for an hourly employee who works variable hours, the underwriter should:

Accepted Answer

Average the income over the most recent two-year period

Answer

Use the rate stated on the most recent pay stub multiplied by 40 hours

Answer

Use only the base guaranteed hours per the employment contract

Answer

Exclude overtime and use only the base hourly rate

Question 5

A borrower receives bonus income of $12,000 in one year and $8,000 the prior year. The current base salary is $60,000. What qualifying income should the underwriter use?

Accepted Answer

$70,000 ($60,000 base + $10,000 averaged bonus)

Answer

$60,000 only, as bonus income is not stable

Answer

$72,000 ($60,000 base + $12,000 current bonus)

Answer

$68,000 ($60,000 base + $8,000 lower bonus)

Question 6

A borrower is a commissioned salesperson earning 100% commission. What documentation is typically required beyond pay stubs?

Accepted Answer

Two years of personal tax returns to verify commission income

Answer

Only a letter from the employer confirming the commission structure

Answer

A one-year profit and loss statement signed by a CPA

Answer

Three months of bank statements showing commission deposits

Question 7

Under agency guidelines, how long must a borrower typically be in a new job position before that income can be used for qualification?

Accepted Answer

The income can be used immediately upon start date with an offer letter

Answer

30 days of paystubs are required before use

Answer

Six months in the position is required for all borrowers

Answer

One full year in the new role before qualifying