The Department of Housing and Urban Development (HUD) recently announced new rules for FHA-approved mortgage loans that apply to people who receive assistance from Social Security, including Social Security Disability (SSD) or Supplemental Security Income (SSI) benefits.
Social Security benefits income, whether from disability, retirement, or SSI, can be considered when a person is applying for an FHA-approved loan. In order to provide the loan, the lender has to verify the person’s income. HUD allows borrowers to verify their income by using one of any four of these documents: a federal tax return; a bank statement showing a deposit from the SSA (Social Security Administration); a “proof of income” letter from the SSA; or a copy of his or her Social Security Benefit Statement, SSA-1099/1042S.
In addition to one of these four pieces of information, the lender must see a copy of the borrower’s last Notice of Award letter from the SSA or any “equivalent document” that shows the borrower receives SSA benefits and how long those benefits are likely to last.
Under the new rule, if the Notice of Award or equivalent document does not show an expiration date for SSD, SSI, or other benefits, the lender may not ask for additional documentation, but must assume that the benefits will continue to be paid for at least three years. Previously, lenders were not prohibited from asking for additional documentation.
Social Security disability benefits can provide needed support if you’re disabled. If you need help obtaining benefits or appealing a denial, contact an experienced California Social Security disability benefits lawyer at The Kenton Koszdin Law Office today. Our number is (800) 438-7734, and your initial telephone consultation is free and confidential.