Can a mortgage lender ignore my part-time, retirement or public assistance income?

What does the law say?

The Equal Credit Opportunity Act bars lenders from discriminating against an applicant because of race, color, religion, national origin, sex, marital status or age (if you're old enough to sign a contract), because some of your income comes from a public assistance program, or because you've used your rights under federal consumer credit laws. The federal Fair Housing Act separately bars discrimination in home loans because of race, color, religion, sex, disability, familial status or national origin.

Regulation B, the rule that carries out the Equal Credit Opportunity Act, spells out how lenders must treat several kinds of income.

Which income can't be discounted?

• Part-time work. A lender can't discount or leave out income because it comes from a part-time job.
• Retirement income. The same goes for an annuity, pension or other retirement benefit.
• Public assistance. A lender generally can't take into account that income comes from a public assistance program, except to judge a relevant factor such as how long the benefit will last.
• Alimony, child support and separate maintenance. If you rely on these to qualify, the lender must count them to the extent they're likely to be paid consistently.
• A spouse's income. A lender can't discount a spouse's income on a prohibited basis.

What can a lender still look at?

Regulation B lets a lender consider the amount of any income and how likely it is to continue. That's why you'll still be asked for documents, such as award letters, pay stubs or a court order, and why loan programs have rules about how long income must be expected to last. Those rules apply the same way to every applicant. You also don't have to list alimony, child support or separate maintenance at all if you don't want it counted.

What other protections apply?

• A lender can't assume that someone will have or raise children and lose income because of it.
• Married and unmarried applicants must be judged by the same standards, and joint applicants can't be treated differently because they are or aren't married.
• If credit history is considered, you can ask the lender to consider accounts reported in a spouse's or former spouse's name that you can show reflect your own credit, and to consider information showing your credit history doesn't accurately reflect your creditworthiness.
• A lender may not use your age against you, though it may consider age in limited ways the rule allows, such as to favor an older applicant. See getting a mortgage in retirement.

What if I think I was treated unfairly?

If you're denied, the lender must send a notice with the specific reasons or tell you how to ask for them. You can file a complaint with the Consumer Financial Protection Bureau online, and housing discrimination complaints can also go to HUD. See what to do if your mortgage is denied.

Elite Mortgage Group is an Equal Housing Opportunity company. Tom reviews every source of income you have, including benefits and part-time work, under the same loan program rules.