Are you required to include alimony income in your mortgage application if you do not report it on your tax returns?

By Michael Jensen, Mortgage and Finance Guru

Edited by Harry Jensen, Trusted Mortgage Expert with 45+ Years of Experience

Updated October 20, 2020

When you apply for a mortgage you are not required to include alimony as a source of income, especially if you do not report alimony on your tax returns. It sounds like you would prefer to not use alimony income on your mortgage application which is fine, although the lower your income, the lower the mortgage amount you can afford.

Usually borrowers want to include alimony as a source of income when they apply for a mortgage because the additional income enables you to qualify for a higher loan amount. As long as the income is expected to continue for at least three years and you can document the income, lenders include alimony or child support to determine the mortgage you qualify for.

Use ourMORTGAGE QUALIFICATION CALCULATORto determine the mortgage you can afford with and without alimony payments

Lenders typically require that borrowers who include alimony income on their mortgage application also report the alimony on their tax returns because this allows the lender to verify the income. If you do not report alimony on your tax returns and cannot provide other documentation that verifies the income, lenders usually do not include that income in your mortgage application, which affects the loan you qualify for.

Please note that some lenders request that divorced applicants provide a copy of their divorce agreement including the alimony or child support schedule. Lenders are typically focused on alimony obligations that borrowers are required to pay -- which is considered debt when you apply for a mortgage -- but may also review these documents for borrowers who receive alimony. This documentation requirement is more applicable if you want to include alimony income when you apply for a mortgage.

Mortgage qualification requirements vary by lender and loan program. We recommend that you contact multiple lenders in the table below to understand their eligibility guidelines for applicants that receive alimony.

Sources

"B3-3.1-09, Alimony or Child Support."  Selling Guide: Fannie Mae Single Family.  Fannie Mae, October 2 2019.  Web.