Fannie Mae updates income and employment documentation

Employment verification methods are more flexible

Fannie Mae removed the list of specific methods a lender must use to complete a verbal verification of employment. The lender may now use a method that is reasonable, verifiable and appropriate for the borrower's employment or income type. The timing requirements for completing the verification did not change.

Sources: Fannie Mae · Announcement SEL-2026-09 · October 7, 2026

A specific rule for Schedule K-1 income starts December 2

For applications dated on or after December 2, 2026, lenders must complete a verbal verification of employment when a borrower qualifies with Schedule K-1 income from a business in which the borrower owns less than 25%. If rental income is the only income reported on the K-1, this verbal verification is not required.

Sources: Fannie Mae · Announcement SEL-2026-09 · October 7, 2026

Income continuance and job offers were clarified

Income with a defined expiration date must be expected to continue for at least three years from the application date, rather than from the note date. This clarification is effective immediately.

For an employment offer or contract, acceptance of a fully executed, non-contingent offer may be shown through a signed agreement, written confirmation such as an email, or another verifiable method. Fannie Mae also added documentation guidance for annuity, pension and retirement income that begins after closing but before the first payment date.

Sources: Fannie Mae · Announcement SEL-2026-09 · October 7, 2026

What borrowers should confirm

These are documentation and policy clarifications for loans sold to Fannie Mae. They do not guarantee that income will qualify, remove the lender's underwriting review, or confirm which loan program or investor applies to a specific application.

• Identify every income source that will be used to qualify and when it begins or ends.
• Ask which verification method and supporting documents the lender requires for the specific file.
• If Schedule K-1 income is involved, confirm the ownership percentage and whether the income is business, employment or rental income.

Sources: Fannie Mae · Announcement SEL-2026-09 · October 7, 2026