Where an Eligible Non-Borrowing Spouse voluntarily provides information on his or her income, Mortgagees (Lenders) may use the residual income of the Eligible Non-Borrowing Spouse in one of two ways:
- as a compensating factor; or
- to reduce the family size by one (see Table of Residual Income in Section 3.100 of the HECM Financial Assessment and Property Charge Guide).
To be used as a compensating factor or to reduce family size, the Eligible Non- Borrowing Spouse must disclose and have his or her Social Security Number (SSN) verified and must meet the same documentation and verification standards as required for the Borrower’s income. Non-taxable income must not be grossed up, and imputed income from dissipated assets must not be included.
For additional information see Mortgagee Letter 2016-10 and the attached revised HECM Financial Assessment and Property Charge Guide, Section 3.4 at
https://www.hud.gov/program_offices/administration/hudclips/letters/mortgagee