Fannie Mae’s policy regarding use of the IRS Form 4506-T to validate borrower income documentation for underwriting and QC purposes requires the lender to:
- have each borrower (regardless of income source) complete and sign a separate IRS Form 4506-T for each type of transcript required at or before closing (for example, one IRS Form 4506-T to be completed and signed for personal returns and another for business returns), and
- add the execution of IRS Form 4506-T with the IRS (directly or through an authorized vendor, like 4ustax.com) to its written QC plan. Refer to the Selling Guide, Subpart D1, Lender QC Process, for details about lender QC requirements.
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