source:
  type: guide
  id: fnma-sel-b3-3.1-02
  authority: Fannie Mae Selling Guide B3-3.1-02 — Tax Return and Transcript Documentation
    Requirements
  description: Fannie Mae Selling Guide B3-3.1-02 — Tax Return and Transcript Documentation
    Requirements.
  coverage_tier: operative
obligations:
- id: fnma-sel-b3-3.1-02-full
  canonical_id: fnma-sel-b3-3.1-02-full
  section: Fannie Mae Selling Guide B3-3.1-02 — Tax Return and Transcript Documentation
    Requirements
  type: do
  tags:
  - regulator-direct
  - fnma
  - selling-guide
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: Fannie Mae Selling Guide B3-3.1-02 — Tax Return and Transcript Documentation
      Requirements
    source_class: fnma-guide
    source_url: https://singlefamily.fanniemae.com/media/document/pdf/selling-guide
    snapshot_id: 5f7b8b79da595d76
    fetched_at: '2026-05-25T14:09:57Z'
    content_hash: sha256:98cf85a02861bbe84914a0e339b327c8fc131869a8a573882007bbeea60c5701
    paragraph_quote: 'B3-3.1-02, Tax Return and Transcript Documentation Requirements
      (03/04/2026) Introduction Tax returns and transcripts can be used to calculate
      and verify certain types of borrower income. This topic contains the requirements
      for use of tax return information including: Federal Income Tax Return Standards
      Published May 6, 2026 303 Using Tax Return Transcripts in Lieu of Tax Returns
      Use of IRS Form 4506-C to Verify Borrower Income Documentation Retaining Tax
      Documents Federal Income Tax Return Standards When required, personal federal
      income tax returns must be copies of the original returns that were ﬁled with
      the IRs. All supporting schedules must be included. Alternatively, the lender
      may obtain applicable transcripts of federal income tax returns. “Most recent”
      tax return is deﬁned as the last return scheduled to have been ﬁled with the
      IRS. See B1-1-03, Allowable Age of Credit Documents and Federal Income Tax Returns.
      Each tax return must be signed by the borrower unless the lender has obtained
      one of the following signature alternatives: documentation conﬁrming that the
      tax returns were ﬁled electronically, a completed IRS Form 4506–C (signed by
      the borrower) for the year in question, or IRS transcripts that validate the
      tax return. See the speciﬁc income topics in Chapter B3-3, Income Assessment
      for additional information and speciﬁc documentation requirements. Using Tax
      Return Transcripts in Lieu of Tax Returns When federal income tax information
      is used to document income for qualifying purposes, the lender may obtain transcripts
      of the applicable federal income tax documents. For example, the lender may
      obtain Tax Return Transcripts for Form 1040 or Wage and Income Transcripts for
      W-2s, 1098s, and 1099s. In certain instances, tax transcripts may not provide
      suﬃcient detail to support the qualifying income. In those cases, the lender
      must obtain copies of the actual returns, schedules, or forms. For example,
      the lender must obtain copies of Schedules B through F, Schedule K-1, or business
      returns, unless: the income reﬂected on the applicable schedule transcripts
      is positive, and the income supported by that schedule or form is not being
      used for qualifying. If a borrower’s self-employment income from a sole proprietorship
      (as reported on IRS Form 1040, Schedule C or C-EZ) is validated by the DU validation
      service, the lender is not required to obtain the tax returns. Documentation
      in accordance with the DU message is acceptable. The DU message may allow a
      tax transcript rather than the tax returns. See B3-2-02, DU Validation Service,
      for additional information. Use of IRS Form 4506-C to Verify Borrower Income
      Documentation IRS Form 4506-C can be used to obtain tax transcripts for up to
      four years or tax periods and is valid for 120 days after completion (including
      signature) by the borrower. The lender must have each borrower whose income
      is used in qualifying (regardless of income source) complete and sign a separate
      IRS Form 4506-C at or before closing. An alternative form or process is also
      acceptable if it authorizes the release of comparable tax Published May 6, 2026
      304 information from the IRS. Note: When all of a borrower’s income is validated
      by the DU validation service, the lender is not required to obtain a signed
      IRS Form 4506–C for that borrower. Multiple IRS Form 4506-Cs may be required
      depending on the number and type of transcripts required to verify the income
      because only one tax form can be requested per each IRS Form 4506-C. For example,
      a self- employed borrower whose income documentation includes two years each
      of personal and business tax returns must complete: one IRS Form 4506-C to request
      transcript of the personal tax returns, and a separate IRS Form 4506-C to request
      transcripts of the business returns (e.g., Form 1065, Form 1120, Form 1120S).
      The lender must complete IRS Form 4506-C as follows: Enter the lender’s name
      (or the name of the servicer, if servicing will be transferred within 120 days
      of the taxpayer signing the form) as the recipient of the tax documents. Indicate
      the year(s) or tax period(s) for which the borrower’s income was or will be
      used in underwriting the loan. Ensure the form(s) is dated on the same day the
      borrower signs it (or ascertain that the borrower dates the form when they sign
      it). Note: The borrower should not be required to sign an IRS authorization
      form before all items on the form, including the transcript being requested,
      the years/tax periods, and the date, have been completed. In addition, the lender
      must document the requirement to obtain tax transcripts by submitting the IRS
      Form 4506–C to the IRS (directly or through an authorized designee) in their
      written quality control (QC) plan. See D1-3-03, Lender Post-Closing Quality
      Control Reveriﬁcations for details concerning QC requirements. If the lender
      receives the transcript(s) prior to closing, the transcript(s) must be used
      to verify the income documentation provided by the borrower and used in the
      underwriting process. In this case, because the lender has already received
      the tax transcript(s), an additional signed IRS Form 4506-C is not required
      to be signed by the borrower. Note: Borrowers with income from Puerto Rico must
      use Modelo SC 2907 (Solicitud De Copia De Planilla, Relevo De Herencia Y De
      Donacion) rather than IRS Form 4506-C. Applicable forms or processes for eligible
      borrowers ﬁling tax returns in other U.S. territories must be adhered to and
      obtained when required. Retaining Tax Documents The lender must retain all tax
      documents, including either the IRS Form 4506-C or the tax transcript(s) and
      any subsequent explanation or documentation of discrepancies in the loan ﬁle
      for QC review. Recent Related Announcements The table below provides reference
      to recently issued Announcements related to this topic. Published May 6, 2026
      305 Announcements Issue Date Announcement SEL-2026-02 March 04, 2026'
  judgment: false
