Freddie Mac Income Calculator Guide and Large-Deposit Check

How Freddie Mac calculates income

Freddie Mac's Guide bases a self-employed borrower's income on federal tax returns, not on an average of bank-statement deposits. The Seller documents the calculation on Form 91, Income Calculations, or a similar alternative form, such as the Freddie Mac Income Calculator Certificate.

Business bank statements play a supporting role: for example, a review of at least the most recent three months when the latest tax returns aren't available yet, or one month's statement as an alternative way to verify that the business exists.

Freddie Mac's own free Freddie Mac Income Calculator calculates wage, self-employed and rental income from paystubs, W-2s and tax data. Use it, or the lender's tools, for the income figure.

When Freddie Mac requires a large deposit to be sourced

A large deposit is any single deposit exceeding 50% of the sum of the total monthly qualifying income and, when assets are used to repay obligations, the qualifying asset amount from Guide Section 5307.1.

For purchase transactions, the Seller documents the source of a large deposit whose funds are needed to meet the loan's qualifying requirements when it was made no more than 60 calendar days before the Application Received Date, on or before the Note Date, and is shown on documentation in the file.

When a deposit is part verified and part unverified, only the unverified part counts toward the test. A deposit whose source is clearly identified, such as a direct payroll deposit or a tax refund shown on the tax returns in the file, needs no more documentation.

On any loan, purchase or refinance, an unverified deposit used to pay off or pay down debt to meet the qualifying ratios must be sourced.

It doesn't confirm that each deposit is eligible income.