Pension refers to income received from the borrower’s former employer(s). The Mortgagee must verify and document the borrower’s receipt of periodic payments from the borrower’s pension and that the payments are likely to continue for at least three years. The Mortgagee must obtain any one of the following documents:
• Federal tax returns;
• The most recent bank statement evidencing receipt of income from the former employer; or
• A copy of the borrower’s pension/retirement letter from the former employer.
The Mortgagee must use the current amount of pension income received to calculate effective income.
For additional information see Handbook 4000.1 II.A.4.c.xii(H)(2) or II.A.5.b.xii(H)(2) available at https://www.hud.gov/program_offices/administration/hudclips/handbooks/hsgh