A Written Verification of Employment (WVOE) is an essential tool in mortgage underwriting for documenting wages or salaried income, especially when the traditional documentation methods like paystubs or W-2s are unavailable or unsuitable. The WVOE document is particularly useful for non-traditional borrowers or situations where traditional income documentation types do not provide a complete picture. If you're considering using a WVOE for your mortgage application, it's crucial to understand the specific criteria and conditions that apply.

Here's what you need to know:

The Written Verification of Employment (WVOE) is an important tool in mortgage underwriting, particularly when traditional documentation like paystubs or W-2 forms are unavailable or unsuitable. This method is especially helpful for non-traditional borrowers or situations where standard income verification does not provide a complete picture. To be eligible for a WVOE, a borrower must have a stable two-year employment history, ensuring a consistent income source. The WVOE requires the completion of the FNMA written verification of employment Form 1005, a standardized document filled out by the employer to verify employment status and income. This verification can only be used for borrowers purchasing or refinancing a primary residence, ensuring housing stability. Unlike traditional methods, the WVOE does not require paystubs, tax returns, or W-2s, which makes it a more flexible option for some borrowers. However, the WVOE cannot be used alongside gift funds or when the borrower is employed by a family member to avoid conflicts of interest. For self-employed borrowers or those working for small businesses, an internet search is required to verify the legitimacy of the business.

While the WVOE focuses solely on employment income, other sources of income, such as rental income, can be included in the overall qualifying income. It’s important for borrowers to understand these criteria and consult with their loan officer to ensure they meet all eligibility requirements, as there may be specific loan-type restrictions or requirements based on the Loan-to-Value (LTV) matrix. By ensuring that the documentation is complete and accurate, borrowers can benefit from this alternative income verification method to secure their home purchase or refinance.

Final Thoughts

The Written Verification of Employment (WVOE) provides a streamlined way for borrowers to verify their income when traditional documentation is not available or suitable. It offers flexibility for those with solid employment histories, but there are specific eligibility criteria that must be met. By ensuring the documentation is complete, accurate, and supported by bank statements, borrowers can take advantage of this alternative verification method to secure their home purchase or refinance.

Contact your Kind AE to discuss the Loan/LTV matrix and other relevant guidelines to understand your eligibility.

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