Income · Fannie Mae Selling GuideSocial Security and retirement income for a mortgage: what Fannie Mae accepts

Retired buyers qualify on the income they receive. For Social Security (Selling Guide B3-3.4-15), a borrower drawing retirement or disability benefits on their own work record documents it with the SSA award letter, an SSA-1099, the latest signed tax return or transcript, or proof of current receipt; an award letter also works when payments will start by the first mortgage payment date. No minimum history is needed. For own-record retirement or long-term disability, the lender doesn't verify continuance unless it has reason to doubt it; benefits drawn on someone else's record – a spouse, ex-spouse, or a dependent's benefits – and Supplemental Security Income need an award letter and proof of current receipt, and must be expected to continue at least three years from the application date, which can be shown from the SSA's own rules, such as an age limit. The lender may treat 15% of Social Security as nontaxable without documentation and gross it up by 25% – in Fannie Mae's example a $1,500 benefit becomes $1,556 of qualifying income. For pensions, annuities and retirement distributions (B3-3.4-03), the lender verifies the current amount with a statement from the payer, an award or benefit statement, a bank statement, a signed tax return, a W-2 or a 1099. Fixed payments need no minimum history; variable distributions need 12 months and are averaged. Annuity and retirement-account distributions must be expected to last three years – account balances from a 401(k), IRA or Keogh can be combined if the borrower can access them without penalty.