SELF EMPLOYED BORROWER USING IRS FORM 1120S
This document will review how to navigate the UberWriter income analysis tool including the following topics
A) Using IRS Tax Form 1120S to determine income for your self-employed borrower
FNMA B3-3-2.1-08 FNMA B3-3-.2.1-08 Income/Loss reported on IRS form 1065 or 1120S (06/28/2016)
FHLMC 5304.1 Stable Monthly Income for self-employed borrower (03/06/2017)
FHA Appendix 2.0 Analyzing IRS Forms (09/14/2015)
Step by step instructions
A) Using the IRS Tax Form 1120S to determine your self-employed borrowers income
Your borrower should have 1120S self-employed income type for the calculator
On the income tab choose the borrower the income is being evaluated for
Click the magnifying glass next to the1065 income calculator
Enter the most recent tax year being evaluated
The left column is always the most recent year and the right column is the previous year
Enter w-2 information if applicable
Enter K-1 income from the borrowers tax returns
Enter the income from the borrower 1065 tax form.
NOTE UberWriter is programmed
UberWriter contains “pop up” messages for income fields with additional requirements to ensure the most accurate income calculation is determined. For example if you enter a number into line 17D (mortgage notes bonds due in less than 1 year) UberWriter will remind you that this does not need to be deducted from the income if the business has enough cash or the CPA confirms the debt can “roll over”.
Click the save/calculate button on the left side of the screen to complete income analysis.
Review the K-1 and Distribution comparison and follow the appropriate guidelines for Fannie or Freddie(not required on FHA) based on either distributions that support the K-1 amounts or the solvency test to determine which income is acceptable
Use the income analysis section to choose the correct qualified income analysis
1 Year Average
2 Year Average
User override ignores all calculations and will report the income submitted as the qualified income.
Agency Guidelines used to govern UberWriter calculations can be found under “income summary guidelines”
Notes in regards to the borrowers income can be entered in for review by the underwriter, auditor, or investor.
Income notices embedded in calculator
Fannie Mae B3-3.3-08 // FHLMC 5304.1 // FHA Appendix 2.0