Non-Taxable Income Can Be Grossed Up by 25% to Qualify; Child Support and Social Security

This is a reminder that lenders allow borrowers receiving non-taxable income to “gross it up” by 25% for qualifying purposes in most cases. Non-taxable income most commonly includes Social Security income and/or Child Support income.

Such income is sometimes “taxable,” depending on a borrower’s income level overall or how the divorce decree reads. We therefore always need to see tax returns to know for sure.

In most cases, however, it works like this. If a borrower receives $2,000 of non-taxable support per month, we can gross it up to $2,500 for qualifying purposes. This extra “income” is often just enough to enable to a borrower to qualify for the property he or she desires.

Jay Voorhees
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 01524255, NMLS# 335646