Trailing Secondary Wage Earner’s Anticipated Income:

It is not unusual for a household that consists of two wage earners to relocate to another area because one of the wage earners is transferred by his or her employer or finds another job in a new location. Often these individuals will find a home in the new location that they want to purchase before the other wage earner finds a new job. When the relocation takes place in connection with a documented corporate relocation offered by the primary wage earner’s employer, some (or all) of the “anticipated” income from the job that the trailing secondary wage earner expects to obtain in the new area may be considered as acceptable stable income, if the following conditions are satisfied:

• The secondary wage earner is a spouse, relative, domestic partner, fiancée, or fiancé of the primary wage earner. (See the Glossary for definitions of relative and domestic partner.) A secondary wage earner who is the fiancée or fiancé of the primary wage earner does not have to currently reside in the same household with the primary wage earner, although a secondary wage earner who is a spouse, relative, or domestic partner does.
  
• The secondary wage earner has been employed as a salaried employee or as an hourly wage or commissioned employee in the same profession for the past two years and must provide a written statement indicating his or her intention to obtain employment in the new location. If the lender is able to document a reasonable employment market for positions that are the same as (or similar to) the secondary wage earner’s previous position(s), the lender may consider either 100 percent of the secondary wage earner’s documented income from his or her previous employment (if the secondary wage earner’s income does not exceed 33 percent of the total qualifying income) or 50 percent of the secondary wage earner’s documented income from his or her previous employment (if the secondary wage earner’s income exceeds 33 percent of the total qualifying income). The income from the secondary wage earner’s previous employment must be verified and documented in accordance with our standard guidelines. The lender may use the latest salary for a salaried or hourly wage earner as the documented income, but should use an average of a commissioned wage earner’s income for the past two years.
  
• The combined incomes—actual income for the primary wage earner and “anticipated” income for the secondary wage earner—and the combined expenses of the two wage earners result in a total debt-to-income ratio of 36 percent or less. However, higher qualifying ratios may be used when strong offsetting factors exist.
  
• The borrowers have financial reserves (cash or other liquid assets that are easily converted to cash) at closing equal to at least six months of payments for the mortgage and all other recurring debt obligations.
  
• The mortgage has a “representative” credit score of 680 or higher. (The “representative” credit score for the mortgage is the applicable individual credit score for the borrower who had the lower applicable individual credit score.)

If these criteria are not satisfied, the lender may use the trailing secondary wage earner’s intent to obtain employment at the new location to justify the use of a higher qualifying ratio.