Mortgage Navigator • Conventional • Income

Temporary leave, maternity & parental leave

Being temporarily away from work does not mean the lender must ignore the borrower's regular employment income.

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Fannie temporary leave

Fannie defines temporary leave as generally employee-initiated and short in duration, including maternity/parental leave or short-term medical disability. Employer-initiated furlough or layoff is not treated as temporary leave under this rule.

How qualifying income can work

When the borrower will return after the first mortgage payment date, Fannie has a calculation that can combine temporary-leave income with available liquid reserves to supplement the qualifying amount, capped at the borrower's regular employment income.

Fair-lending safeguard: if the borrower is not currently on leave, Fannie says the lender must not ask whether they intend to take leave in the future.
Agency Difference: Freddie has its own temporary-leave requirements. Do not assume Fannie's reserve-supplement formula applies to a Freddie file.

Official guide baseline

Fannie Mae Selling Guide · Freddie Mac Seller/Servicer Guide

Agency guide and AUS findings control over summaries. Lender overlays may be more restrictive.