FHA Child Support Income Guidelines for a Mortgage
For the child support to count as income, you must be receiving it for least 6 months and there must be a 3 year continuance. Child support payments can be used up until the child’s age of 18. The exception is the state of Kentucky where child support can be received for children up through the age of 19.
If the payments are voluntary and not ordered by a divorce decree or court order, there must be a 12 month history of receiving the child support payments.
If the child support payment is variable, it will be up to the discretion of the underwriter to determine how much can be used on the application.
Although the details above outline the Kentucky FHA guidelines for child support income, if the divorce decree indicates payments should extend beyond the age of 18, the lender must accept those terms as they would override the Kentucky FHA Loan Requirements.
Kentucky FHA guidelines Child Support Income Grossed Up
When the lender calculates your child support income, they may gross it up to 115% if it is not taxed. For example, if your child support payment is $100 per month, the lender may use $115 as income on your FHA loan application.
Kentucky FHA guidelines FHA Child Support Documentation
When applying for an Kentucky FHA loan using child support income, the lender may ask for one or more of the following documented items:
- Fully executed copy of the divorce decree
- Documented receipt of prior child support payments
- Voluntary child support payments must be documented for the past 6 months
- Document indicating the payments will continue for the next 3 years
- • Payments are likely to be received consistently for the first three years of the
mortgage;
• A copy of the divorce decree, legal separation agreement, voluntary agreement, or
court order specifying the amount of support and the period of time over which it will
be received is required; and
• Evidence that the funds have been received for the last 6 months using cancelled
checks, deposit slips, Federal tax returns, or court records.
This documentation is just for child support income and is in addition to the other documents needed for an Kentucky FHA loan.
Court Ordered
Length of Receipt
Alimony/child support income received as part of a divorce decree, legal separation documents or court order is eligible for qualifying as follows:
• Must be received for a minimum of 3 months. Document receipt and amount received with bank statements or cancelled checks.
Qualification
• If funds have been received consistently for the most recent 3 months the current payment received may be used for qualifying, or
• If not received consistently, the average of the income received over the previous 2 years must be used to calculate the eligible income for qualifying (< 2 years receipt use the average over the time period received)
Voluntary
Length of Receipt
Voluntary alimony/child support income received is eligible for qualifying as follows:
• A minimum of 12 months receipt is required. Document receipt with cancelled checks, deposit slips or tax returns.
Qualification
• If funds have been received consistently for the most recent 6 months the current payment may be used for qualifying, or
• If funds have not been received consistently for the previous 6 months the average of the income received over the previous 2 years is used for calculating the eligible income for qualifying (< 2 years receipt use the average over the time period received)
Kentucky FHA Child Support Income is Calculated
The lender is going to look at the child support income received for the past three months to determine the effective income. If voluntary payments are made, the lender will look at the most recent 6 months to determine the effective income.
If there were missed payments or inconsistent payments over the past 6 months, the lender will use the average child support income received over the past two years to determine the effective income. If child support income has been in place for less than two years, then it will be averaged for whatever time the payments have been made.
Kentucky FHA Child Support in Arrears
The child support income can disqualify you if there are missed payments in the past three months. If you are making the payments and you are late or have missed payments, then you may be disqualified from applying for an FHA loan.
Joel Lobb Mortgage Loan Officer
American Mortgage Solutions, Inc.10602 Timberwood Circle
Louisville, KY 40223
Company NMLS ID #1364
Text/call: 502-905-3708
fax: 502-327-9119
email: kentuckyloan@gmail.com
http://www.mylouisvillekentuckymortgage.com/
NMLS ID# 57916, (www.nmlsconsumeraccess.org).
