Our borrowers can use IRA funds as income when applying for a mortgage. This financing option opens doors for retirees, self-employed borrowers, and individuals with substantial assets but limited reported income.
Borrowers can now use funds from an Individual Retirement Account (IRA) to help qualify for a mortgage. These funds can be treated as a monthly income stream, even if no withdrawals have started. The calculation is simple:
IRA Funds ÷ 36 = Monthly Income
This amount can be used as a standalone income or combined with other documentation types, such as:
- Full Doc (traditional income verification)
- Bank Statement programs
- 1099 income documentation
Important Guidelines
To determine the qualifying income from IRA assets, the following rules apply:
- If the borrower is age 59½ or older, or if the IRA is inherited, the full amount of funds can be used for qualification.
- If the borrower is under age 59½, the total IRA balance is discounted by 10% before calculating the monthly income.
- Only two months of IRA account statements are needed to verify that the funds are available.
- Borrowers do not need to start or schedule withdrawals from the account to qualify; the account balance can be used as proof of accessible income.
For many clients, especially retirees or investors living off assets, this approach can make the difference between approval and denial. By leveraging IRA funds as qualifying income, borrowers can showcase financial stability even without traditional employment income.
Contact us to learn how we can use your IRA funds to help you qualify for a mortgage loan.
