Income · Fannie Mae Selling GuideDividends, interest and capital gains as mortgage income

Investors and retirees with large portfolios may qualify partly on investment income. Under Fannie Mae's Selling Guide, interest and dividend income (B3-3.4-08) is documented with two years of signed personal tax returns or 24 months of account statements, plus current proof that the borrower owns the assets that earn it; a two-year history is required, and continuance isn't checked unless the assets will be depleted. The income is averaged over two years if stable or rising, or over the most recent year if declining – after subtracting any assets used for the down payment or closing costs. Capital gains (B3-3.4-05) are usually one-time and generally shouldn't be treated as stable income; when a borrower does use them to qualify, the lender needs two years of signed tax returns with Schedule D and evidence that the borrower owns a portfolio that could be sold to make future payments. Two years of history is required, the same two-year or one-year averaging applies, and capital losses on Schedule D don't have to be counted, even if they recur.