Getting approved for a WVOE loan depends on one thing above all else: a clean, consistent employment and income story that can be verified directly through the employer and supported by deposits.
While WVOE loans remove the need for paystubs, W-2s, and tax returns, they are not easier to qualify for if the file is poorly structured. Underwriters expect clarity, alignment, and documentation that makes sense from the first submission.
This guide breaks down the exact requirements underwriters focus on and how brokers can prepare WVOE files correctly from the start.
Who Qualifies for a WVOE Loan
WVOE loans are designed for borrowers with wage or salary income who have a stable employment history and predictable pay.
Strong WVOE candidates typically:
- Have worked for the same employer for at least two years
- Receive consistent payroll deposits
- Work for an established, verifiable company
Borrowers who are self-employed or whose income comes from business ownership do not qualify for WVOE income documentation.
WVOE Employment Requirements
Employment history is a core approval factor for WVOE loans. The employer must be an independent, legitimate business. Employment arrangements that create conflicts of interest or lack third-party verification are not eligible.
How Income Is Approved on a WVOE Loan
Income approval relies on alignment between the employer verification and the borrower’s bank deposits.
Employer-Completed Written Verification
Income is documented using a Written Verification of Employment, most commonly Fannie Mae Form 1005. The form must be completed by:
- Human Resources
- Payroll department
- A company officer
The verification must clearly confirm:
- Employment status
- Length of employment
- Current gross wage or salary
Incomplete or unclear verifications are one of the most common sources of conditions.
Deposit Support Requirements
Borrowers must provide two months of personal bank statements showing payroll deposits.
Underwriters will confirm that:
- Deposits come directly from the employer
- Deposit timing aligns with pay frequency
- Deposits support at least 65% of the gross income listed on the WVOE
The deposits do not need to match the income exactly, but they must logically support the verified earnings.
Credit and Housing History Guidelines
WVOE loans offer flexibility on income documentation, not on payment history.
Underwriters will review:
- Credit score based on the program matrix
- Overall credit consistency
- A 24-month housing history with no late payments (0x30)
Any gaps, late housing payments, or major derogatory events should be addressed early to avoid last-minute issues.
Assets, Down Payment, and Reserves
Borrowers must show verified funds for:
- Down payment
- Closing costs
- Required reserves
Additional guidelines to note:
- First-time home buyers are typically capped at 80% LTV
- Gift funds are not allowed for WVOE loans
Assets must be sourced, seasoned, and documented per program requirements.
Eligible Property Types for WVOE Loans
WVOE loans are generally limited to primary residences and second homes. Standard residential properties are the easiest to approve. Always confirm property eligibility before submitting the file.
How Underwriters Review WVOE Files
Underwriters are focused on logic and consistency, not just documents.
They evaluate whether:
- The borrower’s role aligns with the income claimed
- Employer verification is credible and complete
- Bank deposits support the verified income
- Employment appears likely to continue
The file must also include proof that the employer is an active, legitimate business, typically supported by online verification.
Using Additional Income With WVOE
WVOE income cannot be combined with other active employment income.
However, passive income, such as rental income, may be included if documented using approved alternative methods. All additional income must be clearly sourced and consistent with program guidelines.
Mixing income types incorrectly is a common reason files need to be restructured mid-process.
Common Approval Mistakes to Avoid
Most WVOE issues are preventable when the file is set up correctly.
Common mistakes include:
- WVOE completed by an unauthorized individual
- Deposits that do not support the verified income
- Borrower missing the two-year same employer requirement
- Ineligible employment (family-related employment)
- Missing documentation confirming the employer is active
- Housing history that does not meet 24-month 0x30 requirements
Preparing Borrowers for a Smooth Approval
Borrowers sometimes assume WVOE means minimal review. Setting expectations early helps keep the file on track.
Make sure borrowers understand:
- Their employer must complete the verification accurately
- Bank statements are still required
- Employment changes during the loan process can cause delays
- Consistency matters more than convenience
Clear communication upfront prevents confusion later.
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