Freddie Mac – Income from Future Employment

Under certain guidelines. Freddie Mac allows us to use borrower income from a future employer:

Employment & Earnings Type:

  • Income must be from primary employment.
  • Income must be Base Pay, non-fluctuating salaried earnings.

General Eligibility:

  • Purchase Money Mortgage.
  • 1 unit owner occupied residence

Ineligible Borrower:

  • Employed by a family member or by an interested party
    to the transaction.

Offer Letter or Employment Contract:

  • Copy of the Employment Offer Letter or Employment Contract must
    be fully executed and accepted by the borrower.
  • Offer Letter or Contract must be non-contingent, or provide
    documentation, such as letter (on letterhead), or e-mails from the
    employer verifying all contingencies have been cleared.
  • Must include the terms of employment, including, but not limited
    to, employment start date, and annual base non-fluctuating
    earnings.
  • Documentation confirming employment contracts are reasonably
    common to the particular employment field, industry, or region.

10 Day PCV:

  • 10 day pre-closing verification of employment; verifying the terms
    of the offer letter or employment contract have not changed.

Prior to the Note Date, the seller (MFG) must determine and document in its written
analysis, which of the following options is chosen:

Option 1:

  • The seller is NOT required to obtain a paystub from the new
    employer.
  • The Note Date cannot occur more than 60 days prior to the
    commencement of employment as documented on the offer letter
    or employment contract (& verified verbally).
  • The seller must document adequate income and/or liquid assets to
    pay the monthly housing expense, and other monthly liabilities
    between the Note date and the employment start date.
  • Document an additional 6 months housing expense reserves.

Option 2 – This option is only allowed with Senior Management approval.

  • The seller is required to obtain the paystub from the new employer
    prior to the delivery date; the paystub must validate the income
    used.
  • The seller must document adequate income and/or liquid assets to
    pay the monthly housing expense, and other monthly liabilities
    between the Note date and the employment start date.