Lenders Often Don't Need Tax Returns

    It is a common misconception that lenders always need two years of tax returns for income verification.

    They don’t.

    If borrowers are “W2 Wage Earners” only, with no self-employment or side income of any kind, lenders often only need two years of W2s and a month’s worth of paystubs for income verification.

    These “W2 only” qualifications, however, only apply to Conforming (Fannie Mae, Freddie Mac) loans, and also to VA and FHA loans as long as commission income is less than 25% of total income.

    Even when lenders do need tax returns, they often only need one year of tax returns (when the overall file is strong – large down payment, low debt ratios, good credit, etc.).

    The above exceptions, once again, only apply to Conforming, FHA and VA loans.

    Jumbo lenders almost always require two years of tax returns.

    Jay Voorhees
    Founder/Broker | JVM Lending
    (855) 855-4491 | DRE# 01524255, NMLS# 310167

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