PROGRAMELIGIBILITYINCOMEWORKSHEET
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
Page1 Oct. 2018
COVERSHEET
Income(s)countedintheProgramEligibilityIncomecalculation:
Apersonwhowillhavetitletothepropertyandwillsignthemortgage.(i.e.,aBorrower or Co-Borrower)
ApersonwhoisexpectedbothtoliveintheresidencebeingfinancedandisalegalspouseofaBorrower.
ProgramEligibilityIncome
Listnamesofindividualsinthehouseholdwho
meetoneoftheabovedefinitions:
PersonA PersonB Person
C
INCOME TYPES
BasePayfromanEmployer
$
$ $
AdditionalIncomefromanEmployer $ $ $
SelfEmployment/BusinessIncome $ $ $
IncomefromFinancialAssets $ $ $
GovernmentTransferPayments $ $ $
InsuranceorBenefitPayments $ $ $
InvestmentPropertyNetRentalIncome $ $ $
Child/SpousalSupport $ $ $
RegularCashContributions $ $ $
EmployeeAllowances(N/A) $ $ $
CustodialAccountIncome $ $ $
OtherSourcesofIncome $ $ $
Subtotal $ $ $
TotalProgramEligibilityIncome
Comparewith incomelimits for MFTH/MCC programs
$
In c o m eDocumentation - consider the following when calculating income for the purpose of program eligibility:
· Usestandardemploymentverificationmethodsanddocuments.
Inadditionto
informationobtainedforqualifying/underwritingpurposes,ifneeded,obtainadditionalwritten
informationtocalculateProgramEligibilityIncome.
AskemployerforclarificationiftheBorrowerhasnotbeenonthejoblongenoughtoestablishahistory.
VerificationusedtodetermineProgramEligibilityIncomemustbedatedwithinfourmonthsoftheclosingdate.
Usemostrecentdocumentationprovided.
Useallincomedocumentationavailable(forexample,VOEand 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.
Determineifthereareothersourcesofincome,apartfromwagesfromanemployer.
Texas Department of Housing and Community Affairs | 221 E. 11th Street | Austin, Texas 78701 | Ph#512.475.2120 | myfirsttexashome.com Page2
Oct. 2018
CALCULATINGINCOME
WhencalculatingProgramEligibilityIncome,therearetwotypesofincometoconsiderincomefromanemployerand
incomefromallothersources.DocumentyourcalculationssoeHousingPlus or TDHCAstaffcanunderstandhowyou
arrivedatthetotalProgramEligibilityIncome.Includeallincomeunlessspecificallylistedasexcludedonthis
worksheet.
Part1CalculatingIncomefromanEmployer
DeterminewhethertheBorrowerreceivesbasepayonlyoracombinationofbasepayandadditionalincomefrom
anemployer.

Calculate“BasePayfromanEmployer”
RegularHours/Pay
1. Determinefrequencyofincome‐weekly,biweekly,semimonthly,etc.
2. Identifydocumentationneededtosupportpaymentfrequencyandcalculation.
3. ApplyCalculation‐(BaseWagexHoursWorkedinaPayPeriod)x(#ofPayPeriodsPerYear)
4. ThisshouldapproximatetheannualizedYTDonVOEorpaystubs.Ifnot,checkforadditionalpay,suchas
overtime,bonus,shiftdifferential,et
c.(Employersdon'talwaysbreakthisoutontheVOE).
5. Seeadditionalguidanceoncalculatingbasepayfromanemployer.
Hourlypay Biweeklypay SemiMonthlypay
Multiplythepayperhourbythe
numberofhoursworkedperweek.
Multiplytotalby52weeksayear.
Multiplythebiweeklypayby26. Multiplythesemimonthlypayby24.
Example:
1. $15perhourx40hoursaweek=$600
2. $600x52weeksayear=$31,200
3. $31,200/12=$2,600grossmonthly
basepay
Example:
1. $1,200everytwoweeksx26pay
periodsayear=$31,200
2. $31,200/12months=$2,600gross
monthlybasepay
Example
1. $1,
300semim
onthlypayx24pay
periodsayear=$31,200
2. $31,200/12months=$2,600gross
monthlybasepay
IrregularHours/Pay
1. AnnualizeYTDEarningstotal.
2. Averageprioryear’searningstotal,ifavailable,(orprovidedocumentationandexplanationtosupportnot
usingtheprioryear’searnings.)Dividetheresultingnumberbythenumberofmonthsanddaysworked,and
thenmultiplythatnumberby12monthstogettotalaveragepayfromanemployer.
3. Seeadditionalgui
danceoncalculatingbasepayfromanemployer.
Calculate“AdditionalPayfromanEmployer”:
1. IntheEarningssectionofpaystuborVOE,lookforadditionalincomeearnedthatisnotincludedinbase.(Sick,
vacation,holiday,etc.isgenerallyincludedinbase.)
2. AddupalladditionalincomethatisincludedintheYTDEarningsTotalandnotpartofbase.
3. Averageprioryear’searningstotal,ifavailable,(orprovidedocumentationandexplanationtosupportnotusing
theprioryear’searnings.).Dividetheresultingnumberbythenumberofmonthsanddaysworked,andthen
multiplythatnumberby12monthstogetanaverageofadditionalpayfromanemployer.
4. Seeadditionalguidanceoncalculatingadditionalpay
fromanemployer.
Part2CalculatingIncomefromOtherSources
Texas Department of Housing and Community Affairs | 221 E. 11th Street | Austin, Texas 78701 | Ph#512.475.2120 | myfirsttexashome.com Page3
Oct. 2018
TYPESOFINCOME
WagesfromanEmployerPart1
BasePay
Definition/Inclusions Exclusions
RegularHours/Pay:
Borrowerisscheduledforthesamenumberofhoursperpayperiod.Grosssalaryor
wageincomefromparttime,fulltime,orseasonalworkwithregularhours/pay
IrregularHours/Pay:
Variablehours,seasonalwork,etc.,suchasnursing,restaurant,construction,retailor
parttimeworkwithvariedhoursorpay.
Incomenolongeravailable
Guidance
Borrowerscan'tmanipulateincome(quitjob,etc.)tobecomeeligible.
Includeallincome,includingsick,holidayandvacationpay.
AveragecurrentYTDandprioryear’searningstotal,ifavailable,(orprovidedocumentationandexplanationtosupportnotusing
theprioryear’searnings.). Themostrecentfederalincometaxreturnmayalsobeusedforthispu
rpose.
Incomedocumentationisrequired,andcouldinclude,butisnotlimited,to,paystubs,VOE,taxreturns,W2’s,etc.
Seasonalworkrequiresthesamedocumentationforvariablepayasoutlinedabove,butshouldalsoincludeanyunemployment
benefits,ifapplicable.
o 1099s,taxreturns,and/orverificationfromunemploymen
tofficetoverifyunemploymentbenefits
BasePayCalculationNotes:
AdditionalIncomefromanEmployer
Definition/Inclusions Exclusions
Incomeoverandabovebasepay,suchasovertime,shift
differential,bonuses,profitsharing,tips,commissions,etc.
Onetime(nonrecurring)income;i.e.,incomereceivedoncethat
doesnothaveahistoryandisunlikelytoreoccurinthefuture.
Guidance
Documentationofadditionalpaycouldinclude,butisnotlimitedto,paystubs,VOE,etc.
AveragecurrentYTDandprioryear’searningstotal,ifavailable,(orprovidedocumentationandexplanationtosupportnotusing
theprioryear’searnings).
Alwaysuseanaverageforovertime(unlessemployerandincomehistoryverifiesOTwasforonetime,specialproject,etc.),
commissions,bonuses,shiftdifferentials,an
dsick/vacation/holidaypay(ifnotalreadyincludedinbasepay).
IncludeallincomethatisincludedintheYTDEarningsTotalonapaystuboronaVOE.
AnyincomethatisdeterminedtonotbeincludedinYTDEarningsTotal(forexample
,employerpaidbenefitsormatches,suchas
anHSAmatch)doesnothavetobeincludedintheProgramEligibilityIncomecalculation.
AdditionalPayCalculationNotes:
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Oct. 2018
OtherSourcesofIncomePart1
SelfEmployment/BusinessIncome
Definition/Inclusions Guidance
Individualswhoearntheir
incomethroughconducting
atradeorbusinessthat
theydirectlyoperate
insteadofworkingforan
employerwhopaysthema
salaryorawage.
Determinegrossannualincome.
Useatwoyearaveragefromthemostrecentfederalincometaxreturns.
Selfemploymentincomedocumentationisrequired,andmayinclude,butisnotlimited,to:
o TaxformScheduleC,mostrecenttwoyears
o YTDProfit&LossStatement
o TaxformSc
heduleK1(Form1120
S)
Requestadditionalsupportingdocumentation(i.e.,currentbalancesheetandincomestatement)
whennecessary.
Deductoutofpocketbusinessexpensessuchasofficerent,telephone,etc.,whicharegenerally
taxdeductibleitems.
Includeallentertainmentandtravelexpenses,privateretirementcontributionplans,andpropert
y
orequipmen
tdepreciation.Theseitemsaregenerallytaxdeductible,butmustbeaddedbackfor
theProgramEligibilityIncomecalculationifstartingwiththenetincomeamount.
Ifanetloss,use$0.DonotsubtractthelossfromtheProgramEligibilityIncomecalculation.
Usecautionwithlargevariationsinincome(whetherincreaseordecrease)whenaveragingtwo
years’income.Thedeterminationinthesecasesshouldbedocumentedandsupportedbythe
underwriter.
SelfEmployment/BusinessIncomeCalculationNotes:
IncomefromFinancialAssets
Definition/Inclusions Exclusions Guidance
Incomefrom:trusts,annuities,
dividends,royalties,interestearned
fromnon‐retirementaccounts(savings,
checking,moneymarket,investments,
mutualfunds,etc.)
Onetimelumpsumpayments
Investmentsinretirement
accounts(IRAs,VIPs,403(b)’s,
401(k)’s)
Anycashwithdrawsfrom
retirementsaccounts
Alwayschecktaxreturnsforincomefrom
financialassets.
Includeaverageofperiodicpayments,including
recurring,lumpsumpayments.
Whereassetsafterclosingexceed$5,000,
calculateinterestincomebasedonthegreater
ofactualincomeorimputedincomebasedon
thecurrentpassbooksavingsrate,as
determinedbyHUD.
IncomefromFinancialAssetsCalculationNotes:
Texas Department of Housing and Community Affairs | 221 E. 11th Street | Austin, Texas 78701 | Ph#512.475.2120 | myfirsttexashome.com
Page5
Oct. 2018
InsuranceorBenefitPayments
Definition/Inclusions Exclusions Guidance
Periodicpaymentsderivedfrom:
Longtermcareinsurance
Disabilityinsurance
Pensions
Deathbenefits
Donotincludeonetime,lumpsum
payments.
Includeperiodicinsuranceor
benefitpaymentsatcurrentlevel.
InsuranceorBenefitPaymentsCalculationNotes:
GovernmentTransferPayments
Definition/Inclusions Exclusions Guidance
Governmenttransferpaymentsinvolvepaymentsfor
whichnocurrentservicesareperformedandarea
componentofpersonalincome.
Foodstamps
Governmentpaidchildcarepaid
directlytotheprovider
Fostercareincome
Section8vouchers
Includeallsourcesofthis
incomeatcurrentlevel.Donot
grossup.
Retirementbenefits
Disabilitybenefits
Incomemaintenance
benefits
Pensions
Veteransbenefits
Federaleducation&
trainingassistance
Publicassistance
Worker'sCompensation
SocialSecuritybenefits
Unemploymentinsurance
compensation
GovernmentPaymentCalculationNotes:
InvestmentPropertyNetRentalIncome
Definition/Inclusions Exclusions Guidance
Incomefroman
InvestmentProperty
Potentialroommate
incomeorrental
incomeoffuture
duplexoraccessory
dwellingunit
Calculateinvestmentpropertynetrentalincome
MonthlyGrossRent‐VacancyLoss=GrossAdjustedRent
GrossAdjustedRentPITIandmaintenancecosts=NetRentalIncome.Ifrental
incomeisneg
ative,enter$0.Inaddition,anoperatingstat
ementmaybeusedin
lieuofusingtheabovereferencedformula.
InvestmentPropertyNetRentalIncomeCalculationNotes:
Child/SpousalSupport
Definition/Inclusions Exclusions Guidance
Childsupport,child
care,medicalsupport,
alimony,spousal
maintenance
Courtordered
supportnot
received;must
documentsupport
wasnotreceived
Useaverageofactualsupportreceived.
Reviewdivorce/childsupportagreement.
Checkwithcountysocialserviceagencytodeterminewhetheranypayment
adjustmentshavebeenmadesincetheoriginalpay
mentschedule.
Crosschec
kpaymentschedulewithbankstatements,etc.
Child/SpousalSupportCalculationNotes:
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Oct. 2018
RegularCashContributions
Definition/Inclusions Exclusions Guidance
Regularcashcontributionsfromnonresident(s) Checkbankstatementsforregularcashcontributions.
Includeallregularcashcontributionsfromnonresidents.
RegularCashContributionsCalculationNotes:
EmployeeAllowances
Definition/Inclusions Exclusions Guidance
Car,cellphone,per
diems,etc.
Do not include any car, cell phone, travel per-diem, etc.
EmployeeAllowancesCalculationNotes:
CustodialAccountIncome
Definition/Inclusions Exclusions Guidance
Unearnedincomepaidtochildren
age20oryounger,wholivewiththe
Borrower(s)50%ofthetimeormore
529plans
Accountswheresomeoneotherthantheparentsare
namedascustodian.
Unearnedincomeofadultdependentsage21 orolder
Includeallcustodialaccount
income.
CustodialAccountIncomeCalculationNotes:
OtherSourcesofIncome
Definition/Inclusions Exclusions Guidance
Contractfordeedinterest
income
Anyothersourcesof
incomeasidentifiedor
representedintheloanfile
andapplicable
documentation.
Loans;scholarships;grantsandtuitionreimbursement;
EarnedIncomeTaxCreditrefundpayments;health
insurancepremiumreimbursements(deductedfromgross
pay)andanyoutofpocketexpense(c
opays,etc.)
reimbursements
Onetimelum
psum(nonreoccurring)paymentsfrom:
o Inheritances
o Insurancesettlements
o Lotterywinnings
o Gamblingwinnings
o Capitalgains
o Liquidationofassets
o Settlementsforpersonalloss
Alwaysincludeothersourcesof
incomenotspecifically
excluded.
Forcontractfordeedinterest
income,in
cludeinterestportion
ofpaymentsperthetermsof
theagreement/contract.
OtherSourcesofIncomeCalculationNotes:
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