Does spousal support count as income for a mortgage?

Does spousal support count as income for a mortgage? In many cases, yes – if the payments are documented, consistently received, and expected to continue. Whether you pay or receive alimony or child support can shift your debt-to-income ratio (DTI) and your borrowing power. Here's how lenders verify support, when it counts as qualifying income, and what to prepare before you apply.

Key takeaways:

• Alimony and child support can help or hurt your loan application, depending on your role in the agreement.
• Support payments may count as income if they’re documented, consistently received, and expected to continue for at least 3 years.
• Paying support reduces your borrowing power because lenders view these obligations as a recurring monthly debt.

Understanding alimony and child support

Before we get to how alimony and child support affect your mortgage, let’s review the basics. This is not intended to be legal advice. Consult your attorney and state law for specifics.

Can alimony help you qualify for a mortgage?

Generally, you’re able to include alimony you receive as income for a mortgage if it meets two specific criteria:

• You must have received it consistently for at least 6 months before applying.
• It must be expected to continue for 36 months after applying.

In the mortgage industry, this is sometimes referred to as the “6/36 rule.”

FHA loans require 3 months of payments to establish consistency.

In addition to evidence of payments, you typically need to show a court order, whether it’s your divorce decree or separation agreement. The reasoning for both this and the receipt of payments evidence is that both alimony and child support payments are often missed.

You may qualify with voluntary alimony or child support payments, depending on the lender and the loan, but you might have to show more payments to prove consistency. For example, FHA requires 12 months of receipt for voluntary payments.

How alimony affects DTI

If you make voluntary alimony payments, these may or may not be included in your DTI.

With conforming conventional loans, voluntary payments don’t have to be included. FHA, Jumbo Smart loans from Rocket Mortgage, and VA loans generally require you to include voluntary payments.

Court-ordered payments typically affect DTI unless you’ve already met your payment obligations under the divorce agreement or you have 10 or fewer payments remaining by the time you close. With alimony, you can choose whether it affects DTI directly or whether you have the alimony removed from your qualifying income based on math.

To show you the difference, let’s look at an example. Let’s say you pay alimony to your spouse, and you have the following situation:

• Gross monthly income: $6,000
• Monthly debts: $1,000
• Alimony: $800

Let’s first look at a scenario where alimony is removed from income:

$6,000 - $800 = $5,200

$1,000 ÷ $5,200 = 0.19 or 19%

Now let’s look at what happens when alimony is added to debts:

$1,000 + $800 = $1,800

$1,800 ÷ $6,000 = 0.3 or 30%

In this case, a lender will reduce your income rather than factor the alimony into your DTI.

If you receive the payments, it can only help your DTI because it means more income.

Documentation and proof of income

Whether you’re receiving or paying alimony, the first thing you need is the relevant pages of your divorce decree or other court order. If you’re receiving payments, these can be documented through the following:

• Deposit slips
• Canceled checks
• Court records
• Bank statements
• Online merchant payments

Copies of your debts

Lenders need to understand a client’s debts to calculate DTI, which is necessary to determine the monthly payment they can afford. This is a standard part of the underwriting process.

Lenders verify debts by pulling your credit report. This provides information on credit card balances, auto loans, student loans, and personal loans. Alimony payments usually won’t show up on your credit report unless you’ve been late on your payments.

Income documentation from the past 2 years

Documentation, such as W-2 or 1099 forms, will show your history of employment income to go along with the income received from alimony or child support. You should be able to get these documents from your employer or from the contractors you work with.

Past 2 years of tax documents

Your lender will likely ask for your tax returns for the past 2 years, including all applicable schedules. This gives them a more complete picture of your income, particularly if you’re self-employed or do freelance work. It would also show a history of received alimony or child support. Consistency between documents strengthens your application.

Documentation of any other income sources

If you have other income sources from things like Social Security benefits, rental income, or investment dividends, this also adds to your ability to qualify for the mortgage. Your lender will have its own guidelines regarding how long this needs to continue to be used on your application.

Proof might be in the form of 1099s, lease agreements, or Social Security award letters.

Disclosing child support on a mortgage application

Does child support count as income for mortgage lenders? If you don't want the child support payments you received used to qualify, you don't need to disclose them. While it's your choice, any additional income, including child support, can help your mortgage application and increase the loan amount you qualify for as long as you can document it.

When to list child support as income

Listing child support as income helps you qualify by increasing your income. It’s easiest to qualify if you have court-ordered payments that are consistent. Here’s a list of things you need to show:

• You want to present your own legal documentation, such as a divorce decree, separation agreement, or other court order. If these don't exist yet, a voluntary agreement between spouses may be used, provided it's signed by both parties. Talk to your lender because some states don’t allow voluntary payments to be used in mortgage qualification.
• Child support needs to continue for at least 3 years. If the documentation doesn’t list an end date, you may need a birth certificate to show the child’s age.
• You need to show consistent payments for at least 6 months for conventional loans. VA loans allow for as few as 3 months of payments when there’s a court order.
• You need proof of payment, such as bank statements, canceled checks, deposit slips, or statements from online payment services.

FHA child support income

FHA loans have a couple of unique rules regarding the use of child support income. Here's a brief overview:

• If you have court-ordered payments, you can use them as income with 3 months of receipts.
• If the payments are voluntary, you must show 12 months of consistent receipts.
• If voluntary payments are irregular, you must show up to 24 months.

Your lender can explain the specific standards and documentation needed for your loan type to ensure the income is considered effective for your application.

When child support may not be considered

For conventional loans, lenders generally need to document that payments are expected to continue for at least 3 years after the application date.

In general, payments must be consistent for 6 months to be counted as reliable income.

In instances where payments are irregular, you’ll have to show more documentation to have any chance of qualifying.

If qualifying with existing child support isn’t an option for you, there are other things you can do to strengthen your application, including improving your credit score, paying off debts, or applying with a co-borrower.

When you’re the one paying alimony

Paying alimony doesn’t have to be an insurmountable obstacle to getting a mortgage, but it does have to be factored into your financial picture.

As mentioned above, your lender can either reduce your income by the amount of your alimony payment or treat the payment as a debt. They’ll do whatever affects your DTI less.

While paying alimony can reduce the amount that you may qualify for when getting a mortgage, there are other things you can do to bolster your qualifications, like reducing debt, improving your credit score, showing additional income, and applying with another applicant.

It's also important to make your alimony payments as scheduled. While state laws vary, missed payments can result in negative credit reporting.

Common challenges and solutions

There are common pain points that arise when qualifying for alimony or child support. But there are also things you can do to make qualifying easier:

• Voluntary or informal support arrangements. Although it’s possible to qualify with a voluntary arrangement, you may have to show a longer history of receiving payments. For your own protection, it's better to formalize the arrangement legally, because if you're receiving the funds, you'll have a record of what they should be paying. If you're paying, you'll have an end date.
• Inconsistent payment history. If payments are inconsistent, a lender may not allow you to count on them for mortgage qualification. Try to show at least 6 months of consistent payments.
• Support ending within 3 years. In all cases, the child support or alimony must have an expectation that it will continue for at least 3 years. If you can't qualify with this income, you may show other income streams, such as investments or retirement funds. You can also work on reducing your debts or apply with another person.

Tips for applicants

Applying for a mortgage always requires careful planning, but this can be doubly true when you’re trying to make new arrangements after a significant event like a divorce. Here are some basic tips to get started:

• Redo your budget. Divorced couples often go from two incomes to one. Because of this, it's important to re-examine how much you can afford for all line items in your budget, including your home. Rocket Mortgage offers several calculators that may help.
• Get your credit in order. Couples who rely primarily on joint accounts and loan applications may need to build credit in their own names before buying a new home or refinancing an existing one.
• Consult with legal and financial professionals. If you’re going through a divorce or separation right now, a professional can help you set things up so it's easier to apply for a mortgage when you're ready. Legally formalizing payment agreements and setting up separate accounts can be helpful.
• Get documents together early and do it right. You’ll want to gather the relevant pages of your separation agreement or divorce decree. You’ll also need to document 6 months' worth of payments. Try to separate accounts as early as possible. If your spouse pays into a joint account, it looks like they’re paying themselves.

FAQ

Here are answers to some common questions about how alimony and child support affect your ability to get a mortgage.

Can I use alimony as income if it’s not court-ordered?

Depending on the loan type, voluntary alimony may be allowed, but you may be required to show a longer payment history. It’s easier to qualify with the legal documentation in place. This also is protection for you because there’s recourse if payments aren’t made. If you’re the payer, it gives an end date.

Does a co-signed mortgage affect alimony or child support qualification?

To the extent that a court considers your DTI in the process of making alimony or child support decisions, your portion of the mortgage can be factored into that DTI.

Will my mortgage lender contact my ex-spouse about support payments?

Lenders typically won’t contact your ex-spouse. You just need to be able to show your legal documents and records of consistent payments.

Can I get a mortgage if my alimony payments are ending soon?

Alimony payments ending within 3 years don't qualify as income toward a home loan. This won't, on its own, prevent you from getting a mortgage, but you do need to show other income.

The bottom line: For mortgages, alimony and child support require careful documentation

Alimony and child support can significantly affect a mortgage application, whether you're receiving support or paying it. If you want to use alimony or child support to qualify for a mortgage, you’ll generally need to show 6 months of consecutive payments that will continue for at least 3 years after you apply. It’s also easiest to qualify if you can show the clauses in your separation agreement or divorce decree.

Divorce can be complicated, so we recommend seeking professional legal and financial advice tailored to your situation. If you are prepared to look into your mortgage options, see what you qualify for.