Fill - Free fillable PROGRAMELIGIBILITYINCOMEWORKSHEET For use with the My First Texas PDF form

PROGRAMELIGIBILITYINCOMEWORKSHEET

For use with the

My First Texas Home / Texas Mortgage Credit Certificate (MCC)

Texas Department of Housing and Community Affairs | 221 E. 11th Street | Austin, Texas 78701 | Ph#512.475.2120 | myfirsttexashome.com

Page1 Oct. 2018

COVERSHEET

Income(s)countedintheProgramEligibilityIncomecalculation:

 Apersonwhowillhavetitletothepropertyandwillsignthemortgage.(i.e.,aBorrower or Co-Borrower)

 ApersonwhoisexpectedbothtoliveintheresidencebeingfinancedandisalegalspouseofaBorrower.

ProgramEligibilityIncome

Listnamesofindividualsinthehouseholdwho

meetoneoftheabovedefinitions:

PersonA PersonB Person

INCOME TYPES

BasePayfromanEmployer

$

$ $

AdditionalIncomefromanEmployer $ $ $

Self‐Employment/BusinessIncome $ $ $

IncomefromFinancialAssets $ $ $

GovernmentTransferPayments $ $ $

InsuranceorBenefitPayments $ $ $

InvestmentPropertyNetRentalIncome $ $ $

Child/SpousalSupport $ $ $

RegularCashContributions $ $ $

EmployeeAllowances(N/A) $ $ $

CustodialAccountIncome $ $ $

OtherSourcesofIncome $ $ $

Subtotal $ $ $

TotalProgramEligibilityIncome

Comparewith incomelimits for MFTH/MCC programs

$

In c o m eDocumentation - consider the following when calculating income for the purpose of program eligibility:

· Usestandardemploymentverificationmethodsanddocuments.

 Inadditionto

informationobtainedforqualifying/underwritingpurposes,ifneeded,obtainadditionalwritten

informationtocalculateProgramEligibilityIncome.

 AskemployerforclarificationiftheBorrowerhasnotbeenonthejoblongenoughtoestablishahistory.

 VerificationusedtodetermineProgramEligibilityIncomemustbedatedwithinfourmonthsoftheclosingdate.

 Usemostrecentdocumentationprovided.



Useallincomedocumentationavailable(forexample,VOEand paystub).

Note: The purpose of this worksheet is to provide guidance on income calculations for Program Eligibility. This worksheet is NOT

required to be submitted with the TDHCA Compliance File to eHousingPlus. If there are any questions please contact TDHCA Texas

Homeownership Staff.

This worksheet does not apply to the My Choice Texas Home option.

Lenders should follow the standard lender income calculation (1003 / credit qualifying income) to income

qualify the borrower under the My Choice Texas Home option.

Determineifthereareothersourcesofincome,apartfromwagesfromanemployer.

Texas Department of Housing and Community Affairs | 221 E. 11th Street | Austin, Texas 78701 | Ph#512.475.2120 | myfirsttexashome.com  Page2

Oct. 2018

CALCULATINGINCOME

WhencalculatingProgramEligibilityIncome,therearetwotypesofincometoconsider–incomefromanemployerand

incomefromallothersources.DocumentyourcalculationssoeHousingPlus or TDHCAstaffcanunderstandhowyou

arrivedatthetotalProgramEligibilityIncome.Includeallincomeunlessspecificallylistedasexcludedonthis

worksheet.



Part1–CalculatingIncomefromanEmployer

DeterminewhethertheBorrowerreceivesbasepayonlyoracombinationofbasepayandadditionalincomefrom

anemployer.





Calculate“BasePayfromanEmployer”

RegularHours/Pay

1. Determinefrequencyofincome‐weekly,bi‐weekly,semi‐monthly,etc.

2. Identifydocumentationneededtosupportpaymentfrequencyandcalculation.

3. ApplyCalculation‐(BaseWagexHoursWorkedinaPayPeriod)x(#ofPayPeriodsPerYear)

4. ThisshouldapproximatetheannualizedYTDonVOEorpaystubs.Ifnot,checkforadditionalpay,suchas

overtime,bonus,shiftdifferential,et

c.(Employersdon'talwaysbreakthisoutontheVOE).

5. Seeadditionalguidanceoncalculatingbasepayfromanemployer.

Hourlypay Bi‐weeklypay Semi‐Monthlypay

Multiplythepayperhourbythe

numberofhoursworkedperweek.

Multiplytotalby52weeksayear.

Multiplythebi‐weeklypayby26. Multiplythesemi‐monthlypayby24.

Example:

1. $15perhourx40hoursaweek=$600

2. $600x52weeksayear=$31,200

3. $31,200/12=$2,600grossmonthly

basepay

Example:

1. $1,200everytwoweeksx26pay

periodsayear=$31,200

2. $31,200/12months=$2,600gross

monthlybasepay

Example

1. $1,

300semi‐m

onthlypayx24pay

periodsayear=$31,200

2. $31,200/12months=$2,600gross

monthlybasepay

IrregularHours/Pay

1. AnnualizeYTDEarningstotal.

2. Averageprioryear’searningstotal,ifavailable,(orprovidedocumentationandexplanationtosupportnot

usingtheprioryear’searnings.)Dividetheresultingnumberbythenumberofmonthsanddaysworked,and

thenmultiplythatnumberby12monthstogettotalaveragepayfromanemployer.

3. Seeadditionalgui

danceoncalculatingbasepayfromanemployer.

Calculate“AdditionalPayfromanEmployer”:

1. IntheEarningssectionofpaystuborVOE,lookforadditionalincomeearnedthatisnotincludedinbase.(Sick,

vacation,holiday,etc.isgenerallyincludedinbase.)

2. AddupalladditionalincomethatisincludedintheYTDEarningsTotalandnotpartofbase.

3. Averageprioryear’searningstotal,ifavailable,(orprovidedocumentationandexplanationtosupportnotusing

theprioryear’searnings.).Dividetheresultingnumberbythenumberofmonthsanddaysworked,andthen

multiplythatnumberby12monthstogetanaverageofadditionalpayfromanemployer.

4. Seeadditionalguidanceoncalculatingadditionalpay

fromanemployer.

Part2–CalculatingIncomefromOtherSources

Texas Department of Housing and Community Affairs | 221 E. 11th Street | Austin, Texas 78701 | Ph#512.475.2120 | myfirsttexashome.com Page3

Oct. 2018

TYPESOFINCOME

WagesfromanEmployer–Part1

BasePay

Definition/Inclusions Exclusions

RegularHours/Pay:

Borrowerisscheduledforthesamenumberofhoursperpayperiod.Grosssalaryor

wageincomefrompart‐time,full‐time,orseasonalworkwithregularhours/pay

IrregularHours/Pay:

Variablehours,seasonalwork,etc.,suchasnursing,restaurant,construction,retailor

part‐timeworkwithvariedhoursorpay.

Incomenolongeravailable

Guidance

 Borrowerscan'tmanipulateincome(quitjob,etc.)tobecomeeligible.

 Includeallincome,includingsick,holidayandvacationpay.

 AveragecurrentYTDandprioryear’searningstotal,ifavailable,(orprovidedocumentationandexplanationtosupportnotusing

theprioryear’searnings.). Themostrecentfederalincometaxreturnmayalsobeusedforthispu

rpose.

 Incomedocumentationisrequired,andcouldinclude,butisnotlimited,to,paystubs,VOE,taxreturns,W‐2’s,etc.

 Seasonalworkrequiresthesamedocumentationforvariablepayasoutlinedabove,butshouldalsoincludeanyunemployment

benefits,ifapplicable.

o 1099s,taxreturns,and/orverificationfromunemploymen

tofficetoverifyunemploymentbenefits

BasePayCalculationNotes:

AdditionalIncomefromanEmployer

Definition/Inclusions Exclusions

Incomeoverandabovebasepay,suchasovertime,shift

differential,bonuses,profit‐sharing,tips,commissions,etc.

One‐time(non‐recurring)income;i.e.,incomereceivedoncethat

doesnothaveahistoryandisunlikelytoreoccurinthefuture.

Guidance

 Documentationofadditionalpaycouldinclude,butisnotlimitedto,paystubs,VOE,etc.

 AveragecurrentYTDandprioryear’searningstotal,ifavailable,(orprovidedocumentationandexplanationtosupportnotusing

theprioryear’searnings).

 Alwaysuseanaverageforovertime(unlessemployerandincomehistoryverifiesOTwasforone‐time,specialproject,etc.),

commissions,bonuses,shiftdifferentials,an

dsick/vacation/holidaypay(ifnotalreadyincludedinbasepay).

 IncludeallincomethatisincludedintheYTDEarningsTotalonapaystuboronaVOE.

 AnyincomethatisdeterminedtonotbeincludedinYTDEarningsTotal(forexample

,employer‐paidbenefitsormatches,suchas

anHSAmatch)doesnothavetobeincludedintheProgramEligibilityIncomecalculation.

AdditionalPayCalculationNotes:

Texas Department of Housing and Community Affairs | 221 E. 11th Street | Austin, Texas 78701 | Ph#512.475.2120 | myfirsttexashome.com Page4

Oct. 2018

OtherSourcesofIncome–Part1

Self‐Employment/BusinessIncome

Definition/Inclusions Guidance

Individualswhoearntheir

incomethroughconducting

atradeorbusinessthat

theydirectlyoperate

insteadofworkingforan

employerwhopaysthema

salaryorawage.



 Determinegrossannualincome.

 Useatwo‐yearaveragefromthemostrecentfederalincometaxreturns.

 Self‐employmentincomedocumentationisrequired,andmayinclude,butisnotlimited,to:

o TaxformScheduleC,mostrecenttwoyears

o YTDProfit&LossStatement

o TaxformSc

heduleK‐1(Form1120

 Requestadditionalsupportingdocumentation(i.e.,currentbalancesheetandincomestatement)

whennecessary.

 Deductout‐of‐pocketbusinessexpensessuchasofficerent,telephone,etc.,whicharegenerally

tax‐deductibleitems.

 Includeallentertainmentandtravelexpenses,privateretirementcontributionplans,andpropert

orequipmen

tdepreciation.Theseitemsaregenerallytax‐deductible,butmustbeaddedbackfor

theProgramEligibilityIncomecalculationifstartingwiththenetincomeamount.

 Ifanetloss,use$0.DonotsubtractthelossfromtheProgramEligibilityIncomecalculation.

 Usecautionwithlargevariationsinincome(whetherincreaseordecrease)whenaveragingtwo

years’income.Thedeterminationinthesecasesshouldbedocumentedandsupportedbythe

underwriter.

Self‐Employment/BusinessIncomeCalculationNotes:

IncomefromFinancialAssets

Definition/Inclusions Exclusions Guidance

Incomefrom:trusts,annuities,

dividends,royalties,interestearned

fromnon‐retirementaccounts(savings,

checking,moneymarket,investments,

mutualfunds,etc.)

 One‐timelumpsumpayments

 Investmentsinretirement

accounts(IRAs,VIPs,403(b)’s,

401(k)’s)

 Anycashwithdrawsfrom

retirementsaccounts



Alwayschecktaxreturnsforincomefrom

financialassets.

 Includeaverageofperiodicpayments,including

recurring,lump‐sumpayments.

 Whereassetsafterclosingexceed$5,000,

calculateinterestincomebasedonthegreater

ofactualincomeorimputedincomebasedon

thecurrentpassbooksavingsrate,as

determinedbyHUD.

IncomefromFinancialAssetsCalculationNotes:

Texas Department of Housing and Community Affairs | 221 E. 11th Street | Austin, Texas 78701 | Ph#512.475.2120 | myfirsttexashome.com

Page5

Oct. 2018

InsuranceorBenefitPayments

Definition/Inclusions Exclusions Guidance

Periodicpaymentsderivedfrom:

 Long‐termcareinsurance

 Disabilityinsurance

 Pensions

 Deathbenefits

Donotincludeone‐time,lump‐sum

payments.

Includeperiodicinsuranceor

benefitpaymentsatcurrentlevel.

InsuranceorBenefitPaymentsCalculationNotes:

GovernmentTransferPayments

Definition/Inclusions Exclusions Guidance

Governmenttransferpaymentsinvolvepaymentsfor

whichnocurrentservicesareperformedandarea

componentofpersonalincome.



Foodstamps

 Government‐paidchildcarepaid

directlytotheprovider

 Fostercareincome

 Section8vouchers

 Includeallsourcesofthis

incomeatcurrentlevel.Donot

grossup.

 Retirementbenefits

 Disabilitybenefits

 Incomemaintenance

benefits

 Pensions

 Veteransbenefits

 Federaleducation&

trainingassistance

 Publicassistance

 Worker'sCompensation

 SocialSecuritybenefits

 Unemploymentinsurance

compensation

GovernmentPaymentCalculationNotes:

InvestmentPropertyNetRentalIncome

Definition/Inclusions Exclusions Guidance

Incomefroman

InvestmentProperty

Potentialroommate

incomeorrental

incomeoffuture

duplexoraccessory

dwellingunit

Calculateinvestmentpropertynetrentalincome

 MonthlyGrossRent‐VacancyLoss=GrossAdjustedRent

 GrossAdjustedRent–PITIandmaintenancecosts=NetRentalIncome.Ifrental

incomeisneg

ative,enter$0.Inaddition,anoperatingstat

ementmaybeusedin

lieuofusingtheabove‐referencedformula.

InvestmentPropertyNetRentalIncomeCalculationNotes:

Child/SpousalSupport

Definition/Inclusions Exclusions Guidance

Childsupport,child

care,medicalsupport,

alimony,spousal

maintenance

Court‐ordered

supportnot

received;must

documentsupport

wasnotreceived

 Useaverageofactualsupportreceived.

 Reviewdivorce/childsupportagreement.

 Checkwithcountysocialserviceagencytodeterminewhetheranypayment

adjustmentshavebeenmadesincetheoriginalpay

mentschedule.

 Cross‐chec

kpaymentschedulewithbankstatements,etc.

Child/SpousalSupportCalculationNotes:

Texas Department of Housing and Community Affairs | 221 E. 11th Street | Austin, Texas 78701 | Ph#512.475.2120 | myfirsttexashome.com Page6

Oct. 2018

RegularCashContributions

Definition/Inclusions Exclusions Guidance

Regularcashcontributionsfromnon‐resident(s) Checkbankstatementsforregularcashcontributions.

Includeallregularcashcontributionsfromnon‐residents.

RegularCashContributionsCalculationNotes:

EmployeeAllowances

Definition/Inclusions Exclusions Guidance

Car,cellphone,per

diems,etc.



Do not include any car, cell phone, travel per-diem, etc.

EmployeeAllowancesCalculationNotes:

CustodialAccountIncome

Definition/Inclusions Exclusions Guidance

Unearnedincomepaidtochildren

age20oryounger,wholivewiththe

Borrower(s)50%ofthetimeormore

 529plans

 Accountswheresomeoneotherthantheparentsare

namedascustodian.

 Unearnedincomeofadultdependentsage21 orolder

Includeallcustodialaccount

income.

CustodialAccountIncomeCalculationNotes:

OtherSourcesofIncome

Definition/Inclusions Exclusions Guidance

 Contract‐for‐deedinterest

income

 Anyothersourcesof

incomeasidentifiedor

representedintheloanfile

andapplicable

documentation.

 Loans;scholarships;grantsandtuitionreimbursement;

 EarnedIncomeTaxCreditrefundpayments;health

insurancepremiumreimbursements(deductedfromgross

pay)andanyout‐of‐pocketexpense(c

o‐pays,etc.)

reimbursements

 One‐timelum

psum(non‐reoccurring)paymentsfrom:

o Inheritances

o Insurancesettlements

o Lotterywinnings

o Gamblingwinnings

o Capitalgains

o Liquidationofassets

o Settlementsforpersonalloss

 Alwaysincludeothersourcesof

incomenotspecifically

excluded.

 Forcontract‐for‐deedinterest

income,in

cludeinterestportion

ofpaymentsperthetermsof

theagreement/contract.

OtherSourcesofIncomeCalculationNotes:

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