Income Updates

Tax Transcripts, Self-Employed Employment Verification, & Employment Starting After Note Date.

New Penn Financial is making changes to our policy on the topics outlined below effective immediately. New loan applications, as well as loans currently in the pipeline, are eligible for application of the updated policies as applicable.

Tax Transcript Policy:
New Penn Financial is pleased to announce that tax transcripts for non-self-employed wage earners and retired borrowers are only required in the following circumstances for Conventional (Including HomeReady/HomePossible), FHA and VA products.  Loans/Borrowers not meeting any of the criteria below will no longer need tax transcripts:

  • Bond/HFA loans
  • Loan files where handwritten paystubs are used for income verification
  • Loans where a non-arms-length relationship exists
  • Relationship between Borrower/Seller/Loan Originator exists
  • Borrower employed by third-party originator of loan
  • Borrower is employed by family member except when DU data validation obtained
  • Any of the following are present:
    • Additional income for qualifying is derived from sources such as rental properties, dividend/interest or other income where tax returns are required; or
    • Tax returns are used to document income; or
    • commission (> 25% of income); or
    • At the underwriter’s discretion

Self-Employed Employment Verification:
New Penn Financial is updating our Conventional loan policy (including HomeReady/HomePossible) to permit the existence of a self-employed borrower’s business to be verified within 120 days of the note date for both DU and LPA scored loans.

Employment Starting After Note Date:
New Penn’s policy for borrowers starting employment after the note date is being updated with the following change for Conventional loans (including HomeReady/HomePossible).   A copy of the first pay stub is no longer required when the following requirements are met:

  • Copy of the fully executed offer letter by both employer and borrower
  • Must be non-contingent or provide documentation from employer all contingencies have been cleared
  • Must include terms of employment, including but not limited to, start date and salary
  • Must be primary source of employment
  • Only Base salary/non-fluctuating earnings are permitted for qualifying
  • Borrower employed by a family member or interested party is not permitted
  • Primary residence
  • 1-unit property
  • Purchase transaction
  • Must begin employment within 90 days of the note date
  • Assets sufficient to cover the monthly housing expense and other liabilities between the note date and employment start date
  • 6 months of additional reserves (subject property)
  • Verbal VOE within 10 business days:
    • The terms reflected on the non-contingent offer letter or employment contract accepted by the Borrower have not changed since the acceptance date, including employment start date, base non-fluctuating salary and any other relevant income or employment information
  • DU Scored loans require the underwriter to input Special Feature Code 707

Refer to the Conventional, FHA, VA, HomeReady, and HomePossible product profiles for all requirements.