February 13, 2012
The FHA rules for income verification include a requirement that the lender verify all income sources listed on the FHA loan application. According to the rules for lenders participating in the FHA home loan program, income cannot be counted for purposes of calculating the FHA mortgage loan if it is not stable, verifiable, and likely to continue.
One reader asks;
“Can a retired person qualify for an FHA mortgage? I recently retired, am in the process of selling my current home, after which I will be relocating to another state. Without employment, my source of income is Social Security and withdrawals from a retirement account. Will these qualify?”
Federal housing laws forbid lenders from discriminating against home loan applicants based on age and related factors. The only qualifying data permitted is financially related. FHA loan rules state that all income sources–including retirement income and any federal assistance or benefits such as Social Security–must be verified by the lender.
For retirement income, HUD4155.1 Chapter 4, Section D states;
“Retirement income must be verified from the former employer, or from Federal tax returns.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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