Maternity leave from work is generally short in duration and borrowers on temporary leave may or may not be paid during their absence from work.
If a lender is made aware that a borrower will be on maternity leave at the time of closing of the mortgage loan and that a borrower’s income is needed to qualify for the loan, the lender must determine allowable income and confirm employment as described below.
- The borrower’s employment and income history must meet standard eligibility requirements.
- The borrower must provide written confirmation of his or her intent to return to work.
- The lender must document the borrower’s agreed upon date of return by obtaining, either from the borrower or directly from the employer (or a designee of the employer when the employer is using the services of a third party administer employee leave)
- The lender must receive no evidence or information from the borrower’s employer indicating that the borrower does not have the right to return to work after leave period.
- The lender must obtain a verbal verification of employment. If the employer confirms the borrower is currently on temporary leave, the lender must consider the borrower employed.