USDA Technical Handbook HB-1-3555 §9.11 — Education
USDA HB-1-3555 §9.11 (Education). Gap-fill (verbatim).
Verbatim regulatory text
Verbatim provisions from USDA Technical Handbook HB-1-3555 §9.11 — Education — each quote is a verified substring of the regulator-published source snapshot, not retyped. Quoted for reference; this is not legal advice. The operational layer (P&P updates, prompts) lives in the regulation update kits.
USDA HB-1-3555 9.11 — Education
UCATION The Agency will allow time spent in school towards the required employment history for repayment income This includes college, technical school, and career-based certificates in high school (e.g. health and public safety career tracks). A standard high school diploma without an accompanying certificate does not meet the time requirements.
USDA HB-1-3555 9.11 — Education
08-05-25) PN 649 Guidance documents lack the force and effect of law, unless expressly authorized by statute or incorporated into a contract. USDA may not cite, use, or rely on any guidance that is not available through their guidance portal, except to establish historical facts. ATTACHMENT 9-A Income and Documentation Matrix Income guidance: 7 CFR 3555, Sections 3555.152(a) and (b) This matrix cannot cover every income/asset type, employment scenario, etc. USDA requires approved lenders to use sound judgment to make an accurate and dependable analysis of income per 7 CFR 3555.152. Exclusions may apply under 7 CFR 3555.152(b)(5) and
USDA HB-1-3555 9.11 — Education
-D. Considerations for Income Calculations x Lenders must verify the income for each adult household member for the previous 2 years. x Annual and adjusted annual income calculations must include all eligible income sources from all adult household members, not just parties to the loan note. x Annual income is calculated for the ensuing 12 months, based on income verifications, documentation, and household composition. x Include only the first $480 of earned income from adult full-time students who are not the applicants, or a spouse of an applicants in annual and adjusted annual income. x Income from assets that meet the criteria of Section 9.4 must be included in annual and adjusted annual income. x Repayment income calculations include the income sources of the applicants who will be parties to the note that meet the minimum required history identified in this matrix and have been determined to be stable and dependable income by the approved lender. x Income used in repayment income calculations must be confirmed to continue a minimum of three years into the mortgage. x If the income is tax exempt, it may be grossed up 25 percent for repayment income. x “Documentation Source Options” lists eligible documentation. Every item listed is not required unless otherwise stated. Lenders must obtain and maintain documentation in the loan file supporting the lender’s income calculations. Income Type Annual Income Repayment Income Adoption Assistance or Subsidy If the income will be received in the ensuing 12 months, include the first $480 of adoption income or subsidy assistance for each grantee. Required History: None, the income must be received at the time of submission to the Agency. Lenders must document: o The applicants are currently receiving the income; and o The amount of the income received each month. Benefits that do not include expiration dates on the documentation will be presumed to continue. Documentation Source Options: x Benefit/Award letter to document the amount and duration of payments. x Online payment schedule from the Agency, bank statements, etc. x Federal income tax returns or IRS tax transcripts with all schedules.
USDA HB-1-3555 9.11 — Education
08-05-25) PN 649 Guidance documents lack the force and effect of law, unless expressly authorized by statute or incorporated into a contract. USDA may not cite, use, or rely on any guidance that is not available through their guidance portal, except to establish historical facts. Income Type Annual Income Repayment Income Automobile Allowance Include amounts documented on the pay statements as taxable gross earnings that will be received in the ensuing 12 months. Required History: Two years Continuance: Income will be presumed to continue unless there is documented evidence the income will cease. The full amount of the expense allowance may be included. Refer to Chapter 11 for additional guidance when there is a monthly debt associated with the income (such as a car payment). Documentation Source Options: x Paystub(s)/Earning statement(s). x Contract/agreement from employer to state terms and duration of payments. x Federal income tax returns or IRS tax transcripts with all schedules. Base Wages (Hourly or Salary) Full or Part Time Include amounts received before deductions for payroll taxes, insurance, etc. Include amounts that will be received in the ensuing 12 months. Exclusions may apply under 7 CFR 3555.152(b)(5). Full time students age 18 and above that are not applicants, co- applicants, or a spouse of an applicant will only have $480 of their earnings included in the annual income calculation. These household members are not required to present income documentation. Required History: One year Income must be received at the time of submission to the Agency. The one year of required history may be met through a combination of employers, education, or military service. This history is not required to be with the same or current employer. Applicants that were on leave with their employer due to maternity/paternity leave, medical leave, relocation, etc. remain employed. Underwriters may use discretion for applicants returning to the workforce after leaving a previous job to care for a child/family member, complete education, etc. for an extended time of one year or greater. Documentation Source Options: x Paystub(s)/Earning statement(s). x W-2s. x Written Verification of Employment (VOE) or electronic verifications. x Federal income tax returns or IRS tax transcripts with all schedules. x Section 9.3E provides additional information on employment verification options.
USDA HB-1-3555 9.11 — Education
08-05-25) PN 649 Guidance documents lack the force and effect of law, unless expressly authorized by statute or incorporated into a contract. USDA may not cite, use, or rely on any guidance that is not available through their guidance portal, except to establish historical facts. Income Type Annual Income Repayment Income Boarder Income Guaranteed loans are for the purchase of a primary residence. Boarder income refers to rental income received from an individual renting space inside the dwelling, thus making the property income producing. The financing of income producing property is an ineligible loan purpose for the SFHGLP. Ineligible Ineligible Bonus Include amounts that will be received in the ensuing 12 months based on employment verifications. Exclusions may apply under 7 CFR 3555.152(b)(5). Required History: One year in the same, or similar, line of work. Underwriters must analyze bonus income for the current pay period and YTD earnings. Significant variances (increase or decrease) of 20 percent or greater in income from the previous 12 months must be analyzed and documented (e.g. paid once annually, paid monthly, etc.) before considering the income stable and dependable. Continuance: Income will be presumed to continue unless there is documented evidence the income will cease. Documentation Source Options: x Paystub(s)/Earnings statement(s). x W-2s. x Written VOE or electronic verifications. x Federal income tax returns or IRS tax transcripts with all schedules. x Section 9.3E provides additional information on employment verification options. Capital Gains Include amounts that will be received in the ensuing 12 months. Exclusions may apply under 7 CFR 3555.152(b)(5). Required History: Two years Lenders must analyze the previous two years of capital gains income. An average of the previous two years may be logical, or if the current year was 20 percent less than the previous year, the lesser must be utilized. Required Documentation: x Federal income tax returns or IRS transcripts with all schedules. x Evidence of additional property or assets retained by the applicants through title, bank statements, etc.
USDA HB-1-3555 9.11 — Education
08-05-25) PN 649 Guidance documents lack the force and effect of law, unless expressly authorized by statute or incorporated into a contract. USDA may not cite, use, or rely on any guidance that is not available through their guidance portal, except to establish historical facts. Income Type Annual Income Repayment Income Child Support Include amounts that will be received in the ensuing 12 months. Exclusions may apply under 7 CFR 3555.152(b)(5). Legally enforceable payments that have not been received may be excluded when payments are not received for an extended time and a reasonable effort has been made to collect them through the official entity responsible for enforcing such payments. Court Ordered Payments: Required History: Six months Child support that meets the minimum history, but the payment amounts are not consistent, must use an average consistent with the payor’s current ability/willingness to pay. Voluntary Payment Agreements: Required History: One year Child support that meets the minimum history, but the payment amounts are not consistent, must use an average consistent with the payor’s current ability/willingness to pay. Documentation Source Options: x Final divorce decree, legal separation agreement, or court order (front and pertinent pages) to document the amount and timeframe of the obligation. x Evidence of timely receipt/consistent amount for required history: bank statements, canceled checks, deposit slips, tax returns, etc. Commission Include amounts that will be received in the ensuing 12 months. Exclusions may apply under 7 CFR 3555.152(b)(5). Required History: One year in the same, or similar, line of work. Underwriters must analyze commission for the current pay period and YTD earnings. Significant variances (increase or decrease) of 20 percent or greater in income from the previous 12 months must be analyzed and documented (e.g. variances due to seasonal/holiday, etc.) before considering the income stable and dependable. Continuance: Income will be presumed to continue unless there is documented evidence the income will cease. Documentation Source Options: x Paystub(s)/Earning statement(s). x W-2s. x Written VOE or electronic verifications. x Federal income tax returns or IRS tax transcripts with all schedules. x Section 9.3E provides additional information on employment verification options.
USDA HB-1-3555 9.11 — Education
08-05-25) PN 649 Guidance documents lack the force and effect of law, unless expressly authorized by statute or incorporated into a contract. USDA may not cite, use, or rely on any guidance that is not available through their guidance portal, except to establish historical facts. Income Type Annual Income Repayment Income Contract / Employment Offer Include amounts that will be received in the ensuing 12 months based on employment verifications. Required History: One year The one year of required history may be met through a combination of employers, education, or military service. This history is not required to be with the same or current employer. Applicants moving to a new employer (e.g. school district, same profession, etc.) with a contract to begin employment within 60 days of loan closing may be eligible if the underwriter determines the applicants have reserves available post loan closing to cover all monthly liability payments and the new mortgage obligation until employment begins. Documentation Source Options: x Copy of signed employment contract/offer. x Paystub(s)/Earning statement(s) of current/former employer to confirm employment/income history. x W-2s. x Written Verification of Employment (VOE) or electronic verifications. x Federal income tax returns or IRS tax transcripts with all schedules. x Section 9.3E provides additional information on employment verification options. Depreciation/Depletion The amount(s) of straight-line depreciation and/or depletion documented on acceptable IRS forms may be deducted. Required History: Two years Continuance: These amounts will be presumed to continue unless there is documented evidence they will cease. The amount(s) of straight-line depreciation and/or depletion may be added back to repayment income. Required Documentation: x Federal income tax returns or IRS tax transcripts with all schedules.
USDA HB-1-3555 9.11 — Education
08-05-25) PN 649 Guidance documents lack the force and effect of law, unless expressly authorized by statute or incorporated into a contract. USDA may not cite, use, or rely on any guidance that is not available through their guidance portal, except to establish historical facts. Income Type Annual Income Repayment Income Disability Income – Long Term This section does not refer to disability income received from the Social Security Administration. Include amounts that will be received in the ensuing 12 months. Exclusions may apply under 7 CFR 3555.152(b)(5). Required History: None, the income must be received at the time of submission to the Agency. Lenders must document: o The applicants are currently receiving the income; o The amount of the income received each month; and o Determine if there is a contract termination or modification date. Documentation Source Options: x Verification from the disability policy or benefits provider to document the applicant’s eligibility for benefits, amount and frequency of payments, and termination/modification date. x Federal income tax returns or IRS transcripts with all schedules. Dividends Include amounts that will be received in the ensuing 12 months. Exclusions may apply under 7 CFR 3555.152(b)(5). Required History: Two years Required Documentation: x Account statements to support amount of income utilized for repayment purposes, including the balance, rate of interest, and payment amounts/continuance. x Federal income tax returns or IRS tax transcripts with all schedules. Earned Income Tax Credit Do not include Do not include Employee Fringe Benefits Include amounts documented on the pay statements as taxable gross earnings that will be received in the ensuing 12 months. Exclusions may apply under 7 CFR 3555.152(b)(5). Required History: One year Employer-provided fringe benefit packages documented on earning statements as taxable income may be included. Documentation Source Options: x Paystub(s)/Earning statement(s). x Contract/agreement from employer to state terms and duration of payments. x Written VOE or electronic verifications. x Federal income tax returns or IRS tax transcripts with all schedules. x Section 9.3E provides additional information on employment verification options.
USDA HB-1-3555 9.11 — Education
08-05-25) PN 649 Guidance documents lack the force and effect of law, unless expressly authorized by statute or incorporated into a contract. USDA may not cite, use, or rely on any guidance that is not available through their guidance portal, except to establish historical facts. Income Type Annual Income Repayment Income Employment Related Account This income source may be a non-self-employed severance package. Lump sum retirement packages should refer to Retirement Income. All payments must be deposited to a verified asset account with acceptable documentation of receipt. Include amounts that will be received in the ensuing 12 months. Exclusions may apply under 7 CFR 3555.152(b)(5). Required History: None, the income must be received at the time of submission to the Agency. Lenders must document: o The applicants are currently receiving the income; o The amount of the income received each month; and o Determine if there is a contract termination or modification date. Required Documentation: x Contract/agreement from employer to state terms and duration of payments. x Benefit/Award verification letter, IRS 1099, evidence of current receipt, bank statements, etc. x Federal income tax returns or IRS transcripts with all schedules. Expense Allowance Include amounts documented on the pay statements as taxable gross earnings that will be received in the ensuing 12 months. Exclusions may apply under 7 CFR 3555.152(b)(5). Required History: Two years Continuance: Income will be presumed to continue unless there is documented evidence the income will cease. The full amount of the expense allowance may be included. Refer to Chapter 11 for additional guidance when there is a monthly debt associated with the income. Documentation Source Options: x Paystub(s)/Earning statement(s). x Contract/agreement from employer to state terms and duration of payments. x Federal income tax returns or IRS tax transcripts with all schedules. Foreign Income Include all wages, salaries, and additional income types that will be received in the ensuing 12 months. Exclusions may apply under 7 CFR 3555.152(b)(5). Required History: One year (Refer to Base Wages) Continuance: Income will be presumed to continue unless there is documented evidence the income will cease. Documentation Source Options: x Paystub(s)/Earning statement(s), translated into English if applicable. x Written VOE or electronic verifications. x Federal income tax returns or IRS tax transcripts with all schedules. x Section 9.3E provides additional information on employment verification options. Foster child or adult income Do not include Do not include
USDA HB-1-3555 9.11 — Education
08-05-25) PN 649 Guidance documents lack the force and effect of law, unless expressly authorized by statute or incorporated into a contract. USDA may not cite, use, or rely on any guidance that is not available through their guidance portal, except to establish historical facts. Income Type Annual Income Repayment Income GI Bill This income source is paid directly to veterans and/or their dependents attending college or university for the purpose of covering tuition and related expenses. Do not include Do not include Government Benefits Include amounts that will be received in the ensuing 12 months. Exclusions may apply under 7 CFR 3555.152(b)(5) and