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MORTGAGE APPROVAL WITH CHILD SUPPORT DEBT
How far back do mortgage underwriters need to see child support payment history? How do underwriters review child support payment history and how many months of child support payment history is required? What are the agency mortgage guidelines on child support payment history on HUD, VA, USDA, FANNIE MAE, AND FREDDIE MAE AS WELL AS JUMBO AND NON-QM LOANS?
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Underwriters also examine the borrower’s obligation period, which may include payments such as child support and alimony. This will focus on the supporting documents for child support obligations and the payment time frame. These are the processes that underwriters follow in the case of a default mortgage loan.
How Far Back Do Mortgage Underwriters Need to See Child Support Payment History?
Typical Review Period: According to the mortgage underwriters’ requirements, a child support payment history is, on average, more than 3 to 12 months. The time frame can be affected by the type of loan issued, the issuing lender, and the borrower’s financial abilities.
How do Underwriters Examine The Fraudulent Child Support Payment History?
Verification of Payments: Underwriters commonly need collateralizing papers to confirm the production of the child support payment. Collected evidence may include:
Bank Statements: Were there any child support payments made to the account?
Court orders or court agreements: Paperwork establishing the terms of child support.
Payment Records: Of the concerned child support enforcement agency, if any.
Regularity of Payments: Evidence detailing maintenance of receipts and evidence of on-time payment schedules is required. Late or no payments are a concern with the risk of loss of income.
Agency Mortgage Guidelines with Focus on Child Support Payment History:
(HUD FHA Loans):
History Required: The FHA almost always requires the borrower to show at least 3-6 months of child support payments. However, it is possible to request a much longer history relative to their financial situation.
Documentation: The borrower needs to submit paperwork confirming that child support payment income is received regularly or is anticipated to be received for at least three years.
VA Loans: History Required:
VA also generally states that the borrower must have received child support for at least six months.
Documentation: The underwriters expect the courts to document the obligation of child support payments, such as child support orders and their enclosure in the income. This income must be maintainable for approximately three years.
USDA Loans
History Required: A 6-month payment history is required for USDA loans.
Documentation: Like all loan types, the borrower is required to provide evidence that the support payments are received on time through bank deposits or child support enforcement agency records. The income should last for up to three years.
Fannie Mae (Conventional Loans)
History Required: Fannie Mae posts a norm of about six months and warrants around twelve months of child support payment history.
Documentation: The child support widower will need to produce evidence that the child support payments are not irregular and that such payments will last for at least three years. This will require documentation such as payment receipts, child support enforcement agency records, or bank statements.
Freddie Mac (Conventional Loans)
History Required: Freddie Mac tends to want child support payment history to be substantiated for at least six months.
Documentation: Likewise, Fannie Mae requires evidence of income generated from durable payments over three years, such as a track record of deposits or records of the child support agency.
Jumbo Loans
History Required: Old collections are especially common in jumbo loans, which tend to have a very stiff requirement regarding the child support payment history required by the underwriters.
Documentation: Mortgage lenders need extensive documentation. This may include, but is not limited to, child support court orders, payment records, and bank statements, among others, showing how the borrower’s income will be stable for three or more years.
Non-QM Loans:
History Required: Although non-QM (Non-Qualified Mortgage) loans may prove lenient, most underwriters require six to twelve months of child support payment history.
Documentation: Along the same lines, adequate evidence of the income category of child support payments must be provided. This includes, but is not limited to, court orders and bank statements.
Summary of Requirements by Loan Type
HUD (FHA Loans): 3 to 6 months of history for qualification criteria, income must be sustainable for a period of 3 years.
VA Loans: 6 months of history, and income must be sustainable for three years.
USDA Loans: 6 months of history and must sustain three-year income.
Fannie Mae (Conventional Loans): 6 to 12 months of history and income must be sustainable for three years.
Freddie Mac (Conventional Loans): 6 months of history and must sustain income for three years.
Jumbo Loans: 12 months of history and income must be sustained for three years.
Non-QM Loans: 6 to 12 months of history, depending on the lender’s discretion.
Underwriters concentrate on the likelihood of being presented with verified and consistent child maintenance income, guaranteeing that it will remain the same within the foreseeable future. Concise, complete, and well–organized documentation will make the underwriting process smoother and your application stronger.
Please feel free to ask if you need more detailed information or specific advice!