Fannie Mae Selling Guide B3-3.4-15 — Social Security Income

Fannie Mae Selling Guide B3-3.4-15 — Social Security Income

B3-3.4-15, Social Security Income (03/04/2026) Social Security Income Social Security Income The following table provides requirements for Social Security income. Published May 6, 2026 354 Criteria Requirements Documentation The lender must obtain evidence of regular receipt of payments, as verified by the following, depending on the type of benefit and the relationship of the beneficiary (self or other) as shown in the table below. In addition, an SSA Award letter may be used to document the income if the borrower is receiving Social Security payments or if the borrower will begin receiving payments on or before the first payment date of the subject mortgage as confirmed by a recently issued award letter. Type of Social Security benefit Borrower is drawing Social Security benefits based on own account/work record Borrower is drawing Social Security benefits based on another person's account/work record or based on their own account/work record for the benefit of another 1 Retirement • Social Security Administration's (SSA) Award letter, • SSA-1099, • Most recent signed federal income tax returns (or tax transcripts 2), or • Proof of current receipt • SSA Award letter, • Proof of current receipt, and • Three-year continuance Disability • Social Security Administration's (SSA) Award letter, • SSA-1099, • Most recent signed federal income tax returns (or tax transcripts 2), or • Proof of current receipt Survivor Benefits NA Supplemental Social Security Income • SSA Award letter, and • Proof of current receipt NA Published May 6, 2026 355 Criteria Requirements Income History No minimum history is required. Income Continuance Retirement/Long-Term Disability based on own account/work record: Lenders are not required to verify continuance unless they have reason to believe the income may not continue. Other scenarios: The lender must document that income is expected to continue for at least three years from the note date. Note: Confirmation of three-year continuance does not require documentation that provides a defined expiration date and can be assessed by verifying the SSA's requirements related to the specific benefit(s) being paid. For example, if the SSA ties receipt of the benefits to the beneficiary's age, confirmation of a three-year continuance can be met by verifying the beneficiary's age supports that benefit(s) will continue for at least three years from the date of the note date. Determination of Qualifying Income The monthly income amount as documented above may be used as qualifying income. Note: The lender is not required to provide documentation to support that 15% of the Social Security income is nontaxable. Example: • Benefit amount: $1,500 • Nontaxable amount: $1,500 x 15% = $225 • Gross-up amount: $225 x 25% = $56 (rounded to the nearest dollar) • Qualifying income: $1,556 (does not required additional documentation If the lenders opts to gross-up more than 15% of Social Security income, then additional documentation to support that nontaxable income must be included in the loan file. See B3-3.1-01, General Income Information for nontaxable income guidelines. DU Validation Service If a borrower's Social Security income is validated by the DU validation service, DU will issue a message indicating the required documentation. This documentation may differ from the requirements described above. See B3-2-02, DU Validation Service for additional information. Examples of how a borrower might draw Social Security benefits from another person's account/work record and use the income for qualifying: A borrower may be eligible for benefits from a spouse, ex-spouse, or dependent parents (the benefit is paid to the borrower on behalf of the spouse, etc.; or A borrower may use Social Security income received by a dependent (a minor or disabled dependent). 1 Published May 6, 2026 356 If joint tax returns or tax transcripts include income that is not associated with a borrower on the loan transaction, the lender must obtain additional documentation supporting the amount of income from the SSA being used in qualifying, such as the SSA-1099. 2 Recent Related Announcements The table below provides references to recently issued Announcements that are related to this topic. Announcements Issue Date Announcement SEL-2026-02 March 04, 2026

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