In order to qualify for a VA mortgage, you must prove that you can comfortably afford the payments. Sometimes this can be done with your regular income, but sometimes you need that little boost to give you the chance to obtain approval.
The VA, like any other mortgage program, wants to make sure that your income is stable, reliable, and going to continue for the foreseeable future. This includes child support income. You may be able to use it for qualifying as long as it meets all of those requirements.
Proving Child Support Income
Your first step is to prove that you are eligible to receive child support income. The proof must be official. In other words, you can’t tell the lender that you have a verbal agreement with your ex-spouse and that he pays you a specific amount of money each month.
Instead, you need a court ordered document showing the amount of child support your ex-spouse or significant other must pay you. It should state the date you should receive the money, the amount, and the length of time you should receive the income. You’ll need documentation for every child that you receive child support from if you want to include it in your income.
Proving Receipt of the Income
It’s not enough to prove that you are supposed to receive child support income. You must prove that you actually receive it. Typically, you can do this with your bank statements. If you can show the lender the child support deposits on your bank statements for the last 2 – 12 months (varies by lender), they should accept it as proof.
Keep in mind, the deposit must be the exact amount that it states on your court-ordered documents. In other words, don’t accept part of the payment in cash and the other in check. In general, you should never accept cash because you can’t prove its receipt. Lenders won’t let you use the income unless they can see beyond a reasonable doubt that you receive the income.
In order to back up your claims and even the proof of deposit, you should make a copy of the checks received. This way the lender can compare the amount of the check to the amount of the deposit.
Proving Its Continuance
The final factor determining whether or not you can use child support as income on your VA loan is the length of time you’ll receive it.
The VA states that the income must continue for the foreseeable future. Just how long is that? For most lenders, it means at least 3 years. This means if you have a 17-year old, you won’t be able to use the child support you receive for him/her as it will end within the next 12 months. If, on the other hand, you have an 8-year old and a 10-year old, you can use the child support you receive for them because it will continue for at least three years.
Is the Income Seasoned?
One factor that some lenders may require is a bit of seasoning on the income. Seasoning means, basically a waiting period. In other words, you shouldn’t apply for a VA loan the month after you receive your first child support check.
Instead, you should wait at least a few months. The exact amount of time you should wait will vary by lender, though. Some will approve you after just 3 months of receipt of the child support. Other lenders may make you wait until you have proof of receipt of the income for at least 12 months. This gives the lender time to make sure the income is stable and reliable. You have to remember, the lender is relying on another person, not a company to pay you, so the income could be a little less stable.
The short answer is that you can use child support as income on a VA loan. It can help you lower your debt ratio and increase your monthly disposable income, which may help you qualify for the loan. The VA has relaxed guidelines that make it easy to qualify for the VA loan, but they do tend to be a little strict regarding the child support income. They just need to know beyond a reasonable doubt that the income is stable, reliable, and will continue.