Freddie Mac Single-Family Seller/Servicer Guide 5302.2 — Employed income documentation and verification requirements

This section contains information related to: ■ Year-to-date (YTD) paystubs ■ W-2 forms and alternative documentation ■ Written verification of employment (VOE) ■ 10-day pre-closing verification (10-day PCV)

(a) YTD paystub(s) The following table contains requirements and guidance pertaining to YTD paystubs: YTD paystubs Topic Requirements YTD paystubs The YTD paystub(s) must enable the Seller to determine and support the stable monthly income used for qualification. At a minimum, the paystub must: ■ Be dated no more than 30 days before the Application Received Date in addition to complying with the age of documentation requirements in Section 5102.4 ■ Clearly identify the employer’s name, the Borrower as the employee and the date issued ■ Show the time period covered, the current pay period dates and earnings and the complete YTD earnings YTD paystubs with less than the required information: When the YTD paystub does not contain the required information (e.g., paystubs that are handwritten or typed by the employer and do not contain YTD earnings), the Seller must verify the required information by obtaining additional documentation (e.g., written VOE, a review of payroll deposits on bank statements).

(b) W-2 forms and alternative documentation W-2 form(s) must be the complete Internal Revenue Service (IRS) Form W-2 issued by the employer for the preceding tax year(s). The following table contains requirements pertaining to W-2 form alternative documentation: W-2 form alternative documentation Topic Requirements Year-end YTD paystub or military Leave and Earnings Statement The year-end YTD paystub(s) or military Leave and Earnings Statement may be used in lieu of the W-2 form(s) if the documentation reflects the complete income earned in the previous calendar year. W-2 transcript for all income and earnings types The W-2 transcript(s) may be used in lieu of the W-2 form(s) if the transcript reflects the complete income earned in the previous calendar year.

(c) Written VOE A written VOE must contain: ■ Signature, printed name, title and contact information (e.g., phone number) of the authorized employer representative who verified the information ■ The date the information was verified ■ Borrower’s name and employer’s name and address If the employer provides additional information, such as the probability of continued employment and/or income, or comments, the Seller must consider the information with the income and employment analysis. Note: Refer to Section 5102.3 for additional information about verifying documents. The following table contains additional requirements pertaining to written VOEs: Additional requirements for written VOEs Topic Requirements Current employment and income ■ Date employment began ■ Current position ■ Gross base non-fluctuating earnings per pay period (e.g., monthly, bi-weekly) ■ Fluctuating hourly earnings and rate of hourly pay ■ Year-to-date earnings with paid through date ■ Earnings from either the most recent one- or two-year calendar period, in accordance with the requirements in Earnings (e.g., base non-fluctuating, fluctuating hourly, bonus, overtime, tips, commissions) must be split into separate categories for YTD earnings and prior year(s) earnings Current military activeduty employment base (basic) pay and entitlement income ■ Date employment began ■ Current position ■ Base (basic) monthly pay ■ Current monthly entitlement income (e.g., rations, clothing, quarters) ■ Year-to-date earnings with paid through date Current military reserve or National Guard income ■ Date employment began ■ Current position ■ YTD earnings with paid through date ■ Earnings from most recent one-year calendar period Previous employment and income ■ Date employment began ■ Date employment concluded ■ Position held ■ Gross earnings amount (d) 10-day PCV Verification of the Borrower’s current employment must be obtained in accordance with the requirements of this section. The 10-day PCV, when required and unless otherwise noted, must be obtained no earlier than 10 Business Days before the Note Date and no later than the day before the Delivery Date. The following table contains requirements for eligible 10-day PCV types: Eligible 10-day PCV types 10-day PCV types Requirements Verbal verification of employment (verbal VOE) The Mortgage file must include Form 90, Verbal Verification of Employment, or a similar written document that includes: ■ Name of the Borrower, employer’s name, name and title of the individual contacted at employer, date of contact and the phone number used to contact the employer ■ Name of the third-party source used to obtain the phone number for the employer (e.g., phone directory, reliable internet source, directory assistance) ■ Borrower’s current employment status ■ Any additional information that was verified ■ Name, title and employer of the representative who contacted the Borrower’s employer and completed the verbal VOE E-mail VOE The Mortgage file must include: ■ An e-mail exchange with the Borrower’s employer from the independently obtained employer’s work e-mail address that includes: ❑ Borrower’s name and employer’s name ❑ Name and title of the individual contacted at the employer, date of contact and the individual’s work email address ❑ Borrower’s current employment status ■ Information about the third-party source used to obtain the employer’s e-mail (e.g., a reliable internet source) Eligible 10-day PCV types 10-day PCV types Requirements ■ Name, title and employer of the representative who contacted the Borrower’s employer and obtained the email verification Employment commencing after the Note Date (refer to Section 5303.2) In addition to a verbal VOE or e-mail VOE, the Seller must confirm and include on the verbal VOE or e-mail VOE that the terms reflected on the non-contingent offer letter or employment contract accepted by the Borrower have not changed since the acceptance date, including employment start date, salary and any other relevant income or employment information used to qualify the Borrower. Written VOE A written VOE verifying the current employment status of the Borrower in accordance with the requirements of Section 5302.2(c) YTD paystub A YTD paystub that is: ■ From the pay period immediately preceding the Note Date ■ Dated no more than 15 Business Days before the Note Date Military Leave and Earnings Statement A military Leave and Earnings Statement dated no more than 120 days before the Note Date Third-party employment verification service provider – electronically generated Refer to Section 5302.3 for third-party verification requirements. Automated employment assessment with Loan Product Advisor® Refer to Section 5302.6 for requirements.