VOE ONLY

VOE Home Loan “Verification of Employment”

What is the VOE only Program loan.

VOE loan program is where a buyer makes a purchase with 20% down payment and submitting just a Verification Of Employment only, Without tax returns or pay stubs. Some lenders are cutting this program, for investors note holders are finding riskier loans. If you are unemployed and looking to purchase a home with a loan, you will have to show earnings from dividends and interest as your form of income. If you are self-employed, you will want to provide a lender with as much paper as you can showing income: pay stubs, 2 yrs of tax returns and 1099s to determine your financial strength in obtaining a loan. Finally, if you are employed and can have your employment verified (VOE), you will be ready to start the loan application process with a lender. I am more than happy to refer you to someone who may be able to help you with your financial questions. As I am not a professional in that field, it is hard for me to be completely 100%.

The Department of Veterans Affairs has strict requirements for VA loan applicants about disclosing income, residency and other data necessary to approve a VA loan. If the applicant is still in the military, there are specific, VA-mandated ways of verifying that status depending on whether the borrower is active duty, a member of the Guard or Reserve, or a Guard/Reserve member currently activated and on full-time status. The VA asks for a letter from the current military member's chain of command verifying the applicant's status as a member in good standing.

When the applicant is not still a member of the military, the VA requires at least a two-year employment history that includes the most recent military and non-military employers within the last two years. There's also an income verification process separate from employment verification.

Employment and income are two important factors; the VA needs a record of both in the form of pay stubs and Verification of Employment documents that are no more than 120 days old (or up to 180 days old in the case of new construction loans).

The VA does provide a specific form for Verification of Employment, which must be submitted as an original. Pay stubs may be originals or copies but the lender must certify that copy is "a true copy of the original" so it's best to let the loan officer make a copy of the original document rather than providing a photocopied version. There is one exception--Department of Defense employees are allowed to furnish computer printouts of the pay stubs they get via my Pay.

For non-military employers, the VA also allows "alternative documentation" for employment verification. According to the VA, "Alternative documentation may be submitted in place of a VOE if the lender concludes that the applicant's income is stable, reliable, and anticipated to continue during the foreseeable future; that is, if the applicant's income qualifies as effective income. 2 years employment is not required to reach this conclusion."

Alternative documentation consists of one month of the most recent pay stubs, plus the VA loan applicant's most recent two W2 tax forms. The lender can alternatively confirm employment status by telephone.

VA rules for alternative documentation include the caveat that lenders must use standard documentation when an employer refuses to verify over the phone, or when authenticity of the required W2s or pay stubs is questionable.