24-05: AUS Jumbo – Multiple Guideline Updates


Pennymac is updating our AUS Jumbo program. The following guidance is effective immediately:

Rental Income Requirements Update

For loans where the LPA is the AUS utilized:

  • When a rental agreement is used to document rental income, a minimum original term of one year is no longer required
  • For newly executed leases, the first rental payment due date must be no later than the first payment due date of the mortgage
  • When a lease agreement is used, documentation requirements evidencing two months receipt of rental income have been expanded to include:
    • In lieu of documenting two months rental payment receipt, verification of receipt of the security deposit and the first month’s rental payment is now eligible
      • For security deposits, evidence of deposit into an escrow or business account established for this purpose, or evidence payment was cashed and deposited into the borrower’s personal account is required.
    • Payments transferred into a third-party money transfer application account owned by the borrower
  • Refer to the Freddie Mac Selling Guide for complete requirements.

The following changes apply to all loans regardless of AUS utilized:

Non-Taxable Income Gross Up

Social Security Income

15% of Social Security Income may be treated as nontaxable income without having to provide documentation evidencing the nontaxable status. That amount may then be grossed-up by 25% and added to the qualifying income.


Social Security Benefit amount: $1,500
Non-taxable amount: $1,500 x 15% = $225
Gross-up amount: $225 x 25% = $56 (rounded to the nearest dollar)
Qualifying income: $1,500 + $56 = $1,556 (does not require additional documentation)

Please note: If more than 15% of income is grossed up, documentation to verify the income is nontaxable is required

Child Support

Child support may be grossed up 25% without having to provide documentation of its nontaxable status. The following income documentation standards still apply:

  • Copy of divorce decree, legal separation agreement, or legal agreement / court decree describing the payment and terms
  • No less than the most recent 6 months documented receipt required (payments must be timely and regular)

Attorney Opinion Letters

The use of an attorney opinion letter in lieu of a title report is ineligible.

Please contact your Sales Representative with any questions.