Filling out a Request for Verification of Employment is mostly not your job. On Fannie Mae Form 1005, the lender completes Items 1 through 7, you sign the borrower authorization in Item 8, and your employer completes the employment and pay sections and returns the form directly to the lender. Your signature is the whole of your part. Everything else on the page belongs to someone else, and the form is not supposed to pass back through your hands on its way home.1Fannie Mae. Request for Verification of Employment Form 1005
Who Fills Out Which Part
The form has a fixed routing. Your lender identifies you, your employer, and the loan by completing Items 1 through 7 at the top. You sign Item 8, the authorization that lets your employer release the information. The lender then sends the form directly to your employer, who completes Part II if you still work there or Part III if you don’t, signs Part IV, and sends the form back to the lender.1Fannie Mae. Request for Verification of Employment Form 1005
That chain of custody is not a formality. The lender is relying on the form having moved lender to employer to lender without a stop in between. A form that comes back through the borrower is not usable for underwriting.
The Only Line You Fill In
Item 8 is the borrower’s authorization signature. Signing it permits your employer to release your employment and income information to the lender. The form carries a Privacy Act Notice explaining how the information will be used and stating that providing it is voluntary, though declining will stall or end the loan application.1Fannie Mae. Request for Verification of Employment Form 1005
Sign it, hand the form back to the lender, and let the lender route it. Do not deliver it to your employer yourself.
What to Have Ready Before the Form Goes Out
Even though you’re not filling in most of the boxes, your lender needs a few pieces of information from you to complete the top of the form and to cross-check what your employer reports. Have your employer’s full legal name, address, and HR phone number ready. Pull your most recent pay stub, which Fannie Mae requires to be dated no earlier than 30 days before your loan application date, and your W-2s for the most recent one or two years depending on your income type.2Fannie Mae. Standards for Employment and Income Documentation
These documents are not part of Form 1005, but the numbers on them need to match what your employer eventually writes on the form. If your year-to-date earnings on the pay stub differ from the year-to-date figure the employer reports, underwriting slows down. Flag any discrepancy with your loan officer before the form is sent.
What Your Employer Reports
Once the form reaches your employer, Part II (for current employment) is where most of the substance lives. It captures your hire date, current position, and gross base pay, with a checkbox for whether that pay figure is annual, monthly, weekly, or hourly. Separate rows break out overtime, commissions, and bonuses, each reported year-to-date and for the two prior years.1Fannie Mae. Request for Verification of Employment Form 1005
A handful of Part II fields deserve your attention because they shape how the underwriter reads your file:
- Field 11 asks your employer to assess the probability of continued employment. A lukewarm answer can trigger extra scrutiny, especially in contract roles or positions with a known end date.2Fannie Mae. Standards for Employment and Income Documentation
- Fields 18 and 19 record the date and amount of your last pay increase.
- Fields 16 and 17 record the date and projected amount of your next pay increase.
If you recently changed employers, the lender may also send a Form 1005 to your former employer. Part III of that form captures your hire and termination dates, position, salary at termination (broken out the same way as Part II), and reason for leaving.
What Can Slow the Verification Down
Most Form 1005 problems are not caused by the form itself. They are caused by facts underneath it that the form exposes.
Variable Income Won’t Be Taken at Face Value
If your earnings include overtime, bonuses, commissions, or tips, the lender does not simply add the employer’s numbers together. Fannie Mae looks for a minimum two-year history for variable income, though 12 months can qualify when other factors are strong enough to offset the shorter track record.3Fannie Mae. Bonus, Commission, Overtime, and Tip Income
When variable income is stable or increasing, the lender averages year-to-date earnings and prior-year earnings over the total months covered, using at least 12 months. When it is decreasing, the lender first has to confirm the income has stabilized; if it hasn’t, the variable income won’t count at all, and if it has, only the months since stabilization go into the calculation. This is why the year-to-date and prior-year columns on the form matter: a big drop from last year does not get papered over by last year’s higher number.3Fannie Mae. Bonus, Commission, Overtime, and Tip Income
Gaps in the Last 12 Months
If you’ve worked for more than one employer over the most recent 12 months, Fannie Mae does not allow any gap longer than one month within that window, unless the work is seasonal.4Fannie Mae. Standards for Employment-Related Income Shorter gaps still draw questions when they cluster. If you were out for medical reasons, education, or caregiving, a short written explanation to your loan officer is usually enough.
Counting a Raise You Haven’t Received Yet
Fields 16 and 17 capture your next expected raise, but lenders are cautious about counting money not yet earned. Under Freddie Mac guidelines, a future salary increase with your current employer can count as qualifying income only when the raise is for salaried (not hourly) work, the employer is not a family member or party to the real estate transaction, and the increase starts within 90 days of the note date. You also need a fully executed, non-contingent offer letter or contract, cash reserves to cover housing and other debts from closing until the raise begins plus one extra month, and a 10-day pre-closing recheck that nothing has changed.5Freddie Mac. Income Commencing After the Note Date Most borrowers who can qualify on current pay should.
The Verbal Reverification Before Closing
Even after the written form comes back clean, Fannie Mae requires a verbal verification of employment within 10 business days before the note date for salaried and hourly borrowers, and within 120 calendar days for self-employed borrowers. The lender may also complete the verbal check after closing but before delivering the loan to Fannie Mae.6Fannie Mae. Verbal Verification of Employment A layoff or job change between the written verification and closing can pause or cancel the loan, so don’t give notice at your current employer until after closing.
How the Completed Form Gets Back
Your employer returns the completed form directly to the lender through an encrypted portal, encrypted email, or a direct fax from HR. Turnaround varies. Large employers with dedicated HR departments often respond in a few business days; smaller employers, especially those using outsourced payroll, take longer. If five business days pass without the form landing, follow up with both HR and your loan officer. Stuck verifications are a common cause of closing delays, and a phone call usually clears them faster than waiting does.
When Form 1005 May Not Be Used
Many lenders now verify employment electronically through services like The Work Number, which holds payroll data contributed by more than 4.88 million employers.7The Work Number from Equifax. How It Works Fannie Mae’s Desktop Underwriter validation service can take the data from an approved vendor report and validate income and employment automatically; when validation succeeds, the lender may not need to collect Form 1005 at all.8Fannie Mae. DU Validation Service Frequently Asked Questions Whether the file goes electronic or paper is the lender’s call.
Form 1005 also isn’t the right form if you’re self-employed. Self-employed borrowers verify income primarily through tax returns and IRS transcripts, using Form 4506-C to authorize the lender to pull transcripts from the IRS.9Internal Revenue Service. Form 4506-C IVES Request for Transcript of Tax Return If your self-employment income runs through a business entity, expect to sign two Forms 4506-C, one personal and one for the business.10Fannie Mae. Tax Return and Transcript Documentation Requirements
What Counts as Falsifying the Form
Inflating salary, fabricating an employer, or coaching anyone to misstate your income on the verification is federal mortgage fraud. Under 18 U.S.C. 1014, knowingly making a false statement to influence a lending decision carries a maximum fine of $1,000,000, up to 30 years in prison, or both.11Office of the Law Revision Counsel. 18 USC 1014 – Loan and Credit Applications Generally These charges are not reserved for large fraud rings; individual borrowers who overstated income on a single application have been charged under the statute. If the honest numbers don’t support the loan you want, the answer is a smaller loan.