Qualifying With Alimony or Child Support
Support payments count as qualifying income. They need a court document, a receipt history, and proof the payments will keep coming.
Support payments are qualifying income
Documented properly, they work like any other income source.
- Alimony, child support and separate maintenance are named as acceptable qualifying income across agency, jumbo and non-agency programs.
- A three-year continuance from the note date is the most common requirement. Where the income carries more than half your file, some programs extend that to five years.
- You need the underlying legal document: a final divorce decree, legal separation agreement, or court order. One program also accepts a voluntary payment agreement.
- You need proof the money actually arrives. Cancelled checks, deposit slips, bank statements and, on one program, tax returns are all named.
- The receipt history required ranges widely by program, from one month on certain agency refinance programs to six months on most, to twelve months on at least one.
- The same obligation runs the other way too. If you pay support, it counts as a debt, it must be current at application, and any arrears have to be brought current before closing.
Alimony and maintenance
Child support payments
Agency and non-agency
Court documents accepted
Receipt history flexible
Purchase or refinance
The Three Tests Every File Has To Pass
Entitlement, receipt, and continuance. Miss one and the income does not count.
Entitlement is the legal document. A final divorce decree, a legal separation agreement, or a court order establishing that you are owed the payments and on what terms. Guidelines want the actual instrument, not a summary. One jumbo program additionally accepts a voluntary payment agreement, which is unusual and useful where a former spouse pays without a court having ordered it.
Receipt is proof the money arrives. This is where programs diverge most. Certain agency refinance programs are satisfied with one month of documentation. Most jumbo and non-agency programs want six months of cancelled checks, deposit slips, or bank records. At least one wants a full twelve months. If your payments arrive irregularly, the program you choose matters more than anything else in the file.
Continuance is proof it keeps coming. Three years from the note date is the standard, which for child support usually means the children have to be young enough that support runs at least that long. Where support makes up more than half your total qualifying income, expect a five-year requirement on several programs.
What complicates these files
Six issues that come up on support income.
The Children Are Close To Aging Out
Continuance is measured forward from the note date. If child support ends in eighteen months, it generally cannot be used to qualify, no matter how reliably it has been paid.
Payments Have Been Irregular
A history of missed or late payments undermines the receipt test. Some programs will average, some will exclude. Documenting whatever consistent stretch exists, and choosing a program with a shorter receipt window, is often the answer.
There Is No Court Order
Informal arrangements are difficult. One program accepts a voluntary payment agreement, which makes formalizing your arrangement in writing worth doing well before you apply.
It Cannot Always Be The Only Income
At least one program treats support as supplemental passive income that must accompany employment or rental income rather than standing alone. Program selection determines whether your income can carry the file.
You Are The One Paying It
Then it is a liability rather than income. It has to be current at application, it goes into your debt calculation, and arrears must be cleared before closing.
It Is Not Always Grossed Up
Support can be non-taxable depending on your circumstances, and non-taxable income can often be adjusted upward. But at least one program family specifically excludes alimony and child support from gross-up treatment on certain loan types.
Hear From Homeowners Like You
Frequently Asked Questions
Questions about qualifying on support payments.
Yes. It is named as acceptable qualifying income across agency, jumbo and non-agency programs, subject to documentation of entitlement, receipt and continuance.
Three years from the note date is the standard requirement. Where alimony or child support makes up more than half your total qualifying income, several programs require five years.
It depends heavily on the program. Certain agency refinance programs require only one month of documented receipt. Most jumbo and non-agency programs want six months. At least one requires twelve.
The final divorce decree, legal separation agreement, or court order, plus evidence of receipt through cancelled checks, deposit slips or bank statements. One program also accepts tax returns as proof of receipt.
It is harder. One jumbo program accepts a voluntary payment agreement, so putting the arrangement in writing is worth doing. Most programs want a decree or court order.
Generally not, because it fails the three-year continuance test. It may still be worth applying without it if your other income supports the loan.
On most programs yes, but at least one treats it as supplemental income that must accompany employment or rental income. We confirm the treatment before choosing where the file goes.
Find out what you qualify for
Bring us the decree and six months of bank statements showing the deposits. That combination answers most of the questions, and where your receipt history is shorter, it tells us which programs will still work.
Get Pre-QualifiedRequirements for alimony, child support and separate maintenance income, including continuance periods, receipt history and acceptable documentation, vary by loan program and investor and are subject to change. Some programs treat this income as supplemental only. Support obligations you pay are treated as liabilities. Saxton Mortgage does not provide legal advice. Not all applicants will qualify. This is not a commitment to lend.