The Mortgage Files

Nationally syndicated mortgage news and advice from Senior Loan Officer Scott Sheldon.

Understanding Income Averaging in Fannie Mae Loans

By Scott Sheldon / March 6, 2025

When qualifying for a home loan, one challenge many borrowers face is presenting irregular or fluctuating income in a way that accurately reflects their long-term earning potential. Both Fannie Mae and Freddie Mac provide guidelines that allow mortgage lenders to use an averaged income approach to assess a borrower’s ability to repay a mortgage. This…