We are making changes to our FNMA Form 1003 (Cx20667) to align with updated guidance indicating how self-employment income should be reported on the URLA.
The following guidance related to self-employment income is provided in Selling Guide B3-5.01, Income and Employment Documentation for DU (11/02/2021):
“If the borrower is the business owner or is self-employed, the business owner/self-employed indicator must be checked along with the percentage of ownership. DU will consider the borrower self-employed if the ownership share is 25% or more, or if the ownership share is not completed but the business owner/self-employed indicator is checked. If the ownership share is 25% or more, the income is entered in Monthly Income (or Loss) based on the lender’s calculation of net income (or loss) from self-employment. If the ownership share is less than 25%, the income is entered in Gross Monthly Income (base, bonus, overtime, etc.). Schedule K-1 income for these borrowers should be entered as Other in Gross Monthly Income.”
We are updating Cx20667 to enter the self-employment income in the Gross Monthly Income table when the selection indicates the borrower has an ownership of less than 25%.
This change is on ConformX Stage servers for testing and will be available on Production on January 12, 2022. If you have any questions or concerns about these changes, please contact Client Support at 1.800.497.3584.
Please visit the Docutech URLA Resource Center to access additional information on the redesigned URLA, including previous announcements