INCOME ANALYSIS WORKSHEET

Borrower Name: Co-Borrower Name:

P lease Note: If the amount is negative you MUST preface the number with a minus sign (-) in order for the amount to be deducted from the total.

Income Analysis - Cash Flow Quick Method

Individual Tax Return (1040) Wages, salaries, tips, etc. (line 7) Interest (line 8a) Interest (line 8b) Ordinary dividends (line 9a) Ordinary dividends (line 9b) Alimony received (line 11) Business income (loss) (line 12) Other gain (loss) (line 14) IRA distributions (line 15a) Pensions and annuities (line 16a) Farm income (loss) (line 18) Unemployment compensation (line 19) Social security benefits (line 20a) Other income (line 21) Form 2106 Expenses (line 8a) Form 2106 Expenses (line 8b) Form 2106 Depreciation (line 28) Form 2106 Business Miles (line 13) Depreciation Rate Total Business Miles Schedule C Depletion (line 12) Schedule C Depreciation (line 13) Schedule C Meals/Entertainment exclusion (line 24b) Schedule C Business use of home (line 30) Schedule D Capital gain (loss) Short-term (line 7) Schedule D Capital gain (loss) Long-term (line 15) Schedule E Rents (line 3) Schedule E Royalties (line 4) Insurance (line 9) Mortgage Interest paid to banks, etc (line 12) Taxes (line 16) Amortization/Casualty Loss -if noted (line 18) Schedule E Total Expenses (line 19) Schedule E Net Rental Income (loss) Schedule E 179 Expense (line 28i) Schedule E Part./S-corp. income (loss) (line 32) Schedule F Depreciation (line 16)
Year (YY) Yr. $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $

20
$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $

20
$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $

20

0.00 Yr. 0.00

$ $ $ $ $ $ $ $ $ $ $ $ $ $

0.00 Yr. 0.00

$ $ $ $ $ $ $ $ $ $ $ $ $ $

0.00 0.00

0.00

$ $ $ $

0.00

$ $ $ $

0.00

Other Income (Expense)* TOTAL TOTAL 1040 INCOME (A)

*Other income/expense includes items such as amortization.

$ $ $

0.00 0.00

0.00

0.00

INCOME ANALYSIS WORKSHEET

P artnership Tax Return (1065) Depreciation (line 16a) Depletion (line 17) Mortgage, Notes, Bonds Payable in Less Than One Year (Schedule L, line 16)2 Other Income (Expense) (line 7) Subtotal Times Ownership Percentage (K-1 line J) Guaranteed Payments (K-1 line 4) TOTAL TOTAL PARTNERSHIP INCOME (B) 0.00%
3

20
$ $ $ $

20
$ $

20

$ $ $ $ $ $ $

$ $

$ $

0.00 0.00

$ $ $

0.00 0.00

$ $ $

0.00 0.00

0.00 0.00

0.00

0.00

S Corp. Tax Return (1120S) Depreciation (line 14) Depletion (line 15) Mortgage, Notes, Bonds Payable in Less Than One Year (Schedule L, line 17)2 Other Income (Expense) (line 5) Subtotal Times Ownership Percentage (K-1 line F) TOTAL TOTAL S CORP. INCOME (C) 0.00%
3

20
$ $ $ $

20
$ $

20

$ $ $ $ $ $

$ $

$ $

0.00 0.00 0.00 0.00

$ $ $

0.00 0.00 0.00

$ $ $

0.00 0.00 0.00

Corporation Tax Return (1120) Depreciation (line 20) Depletion (line 21) Net Operating Loss (line 29a) Taxable income/loss (line 30) (Total tax) (line 31) Mortgage, Notes, Bonds Payable in Less Than One Year (Schedule L, line 17)2 Other Income (Expense)3 (line 10) Subtotal Times Ownership Percentage (Schedule E) TOTAL TOTAL CORPORATION INCOME (D) GRAND TOTAL (A) (B) (C) (D) 0.00%
$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $

20
$ $ $ $ $

20
$ $ $ $ $

20

$ $

$ $

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1

$ $ $

0.00 0.00 0.00

$ $ $

0.00 0.00 0.00

Total Total divided by # months Total divided by # months

Monthly Income

0.00

T his Income Analysis Worksheet is provided by PMI Mortgage Insurance Co. (PMI) for training and informational purposes only. It is not intended to and should not be relied upon for any other purpose, including mortgage loan underwriting or preparation of tax forms or other documents, and should be reviewed by your own independent legal and compliance advisors. Please direct any questions you may have about this or any other PMI training publication to your PMI representative or call 800.966.4PMI (4764). Please note that the GSE guidelines stated on this worksheet are effective as of February 26, 2010. 2011 PMI Mortgage Insurance Co. 11-0060 (3.11)

Cell: B10 Comment: Income shown here could be generated for a corporation from which the borrower pays himself or herself and/or their spouse. If this is the case, the income can be entered here. If the income is related to a spouse that is employed by another company, the income should be considered separately and not entered on this form. Any income shown here will be reported on a W-2. Cell: B11 Comment: Interest income is earned on assets the borrower owns. It may be added to income if it has been received for the previous two years and it is likely to continue for the next three years. Subtract any assets used for down payment or closing costs from the borrowers total assets before calculating expected future interest income. Cell: B12 Comment: Interest income is earned on assets the borrower owns. It may be added to income if it has been received for the previous two years and it is likely to continue for the next three years. Subtract any assets used for down payment or closing costs from the borrowers total assets before calculating expected future interest income. Cell: B13 Comment: Dividend income is earned on assets the borrower owns. It may be added to income if it has been received for the previous two years and it is likely to continue for the next three years. Subtract any assets used for down payment or closing costs from the borrowers total assets before calculating expected future dividend income. Cell: B14 Comment: Dividend income is earned on assets the borrower owns. It may be added to income if it has been received for the previous two years and it is likely to continue for the next three years. Subtract any assets used for down payment or closing costs from the borrowers total assets before calculating expected future dividend income. Cell: B15 Comment: Typically, alimony income is considered stable if it has been received for at least 12 months. It must continue at least three years after the date of the mortgage application in order to add it in income.

Cell: B16 Comment: Net business income from a sole proprietorship is reported here. The income can be added to income; any losses must be subtracted from income. Detailed income/expenses are reported on Schedule C or C-EZ. Cell: B17 Comment: Other gains/losses are reported if assets used in a trade or business are sold or exchanged. Typically, this is not considered stable or recurring income.

Cell: B18

Comment: IRA Distributions can be added to income if regular and contined receipt of this income can be documented. If retirement income is paid in the form of a monthly distribution from a 401(k), IRA, or Keogh retirement account, determine whether the income is expected to continue for at least three years after the date of the mortgage application.

Cell: B19 Comment: IRA Distributions can be added to income if regular and contined receipt of this income can be documented. If retirement income is paid in the form of a monthly distribution from a 401(k), IRA, or Keogh retirement account, determine whether the income is expected to continue for at least three years after the date of the mortgage application.

Cell: B20 Comment: The net business income from a farm can be added here; detailed income/expenses will be claimed on Schedule F. Cell: B21 Comment: Unemployment benefits may be used in qualifying only if they are verified as a traditional and continuing source of income. A minimum 2-year history is required.

Cell: B22 Comment: Certain portions of income received as Social Security benefits are not taxable; however, the borrower can be given credit for all of this income if the benefits will be ongoing. If the Social Security benefits have a defined expiration date, confirm that the remaining term is at least three years from the date of the mortgage application. Cell: B23 Comment: Income in this category is usually extraordinary and nonrecurring, and should not be considered as income unless you can document that the income is recurring, consistent and stable. Cell: B24 Comment: Form 2106 reports reimbursed and unreimbursed business expenses. Only the unreimbursed business expenses should be subtracted from income. Total expenses in line 8a & 8b and subtract from income.

Cell: B25 Comment: Form 2106 reports reimbursed and unreimbursed business expenses. Only the unreimbursed business expenses should be subtracted from income. Total expenses in line 8a & 8b and subtract from income.

Cell: B26 Comment: Vehicle depreciation may be claimed as part of the borrowers vehicle expense. It is a a noncash expense and can be added to income. Cell: B27

Comment: A mileage expense can be claimed for vehicles used during the tax year for business purposes. A percentage of the deduction can be added to income as this is a non-cash expense. Enter the number of miles. Cell: B28 Comment: The number of miles will be multiplied by the depreciation for the year in which is was claimed to arrive at the amount that can be added to income. Select the year from the drop-down list.

Cell: B29 Comment: Total Business Miles will be automatically calculated based on the year and the number of miles entered above. Cell: B30 Comment: Depletion is a noncash expense reflecting the decrease of a non-renewable resource. If the depletion of this resource will not adversely impact future business operations, the amount of depletion allowance can be added to income. Cell: B31 Comment: Depreciation is a non-cash business expense that is allocated over the useful life of an asset. Depreciation can be added back to income. Cell: B32 Comment: 50% of the borrowers out-of-pocket costs for business-related meals and entertainment are deductible on the tax return. The remaining 50% of costs must be absorbed by the borrower and therefore should be subtracted from the borrowers income.

Cell: B33 Comment: Business use of home is an allowable deduction for business use of the borrowers residence, such as space dedicated to an office or storage of materials and supplies used by the business. This is a non-cash deduction and it can be added back to income. Cell: B34 Comment: Capital Gains/Loss are the profit or loss of the sale of an asset. Income received from a capital gain is generally a one-time transaction; therefore, it should not usually be considered part of the borrowers stable monthly income. If; however, the borrower constantly turns over such assets, capital gains may be added and losses should be subtracted from income. If capital gains are to be considered, develop an average gain (net of capital losses for the period) based on a verified 2-year history. This must be the borrowers primary source of income and none of the assets can be used for closing of the transaction. Cell: B35 Comment: Capital Gains/Loss are the profit or loss of the sale of an asset.

Income received from a capital gain is generally a one-time transaction; therefore, it should not usually be considered part of the borrowers stable monthly income. If; however, the borrower constantly turns over such assets, capital gains may be added and losses should be subtracted from income. If capital gains are to be considered, develop an average gain (net of capital losses for the period) based on a verified 2-year history. This must be the borrowers primary source of income and none of the assets can be used for closing of the transaction. Cell: B36 Comment: Income from rental property may be considered; however, investors vary in how they treat this income. Check your investor guidelines to determine the appropriate calculations. In general, it requires documentation of receipt for the prior 2 years and current lease/rental agreement. Cell: B37 Comment: Royalties can, in some instances, meet the criteria for stable, continuous income. They may be used if there is a history and reasonable expectation of continuance for a minimum of three years. Royalties are generally received from copyrighted material or natural resources. Cell: B38 Comment: Fannie Mae requires that mortgage insurance expenses are added back in the borrowers cash flow analysis. Cell: B39 Comment: Fannie Mae requires that mortgage interest expenses are added back in the borrowers cash flow analysis. Cell: B40 Comment: Fannie Mae requires that mortgage tax expenses are added back in the borrowers cash flow analysis. Cell: B41 Comment: Amortization and Casualty losses can be added back to income. Amortization is a deductible expense allowed as a means of recovering the investment in intangible assets of the business. A Casualty Loss is a type of tax loss that is caused by a sudden, unexpected or unusual event. Cell: B42 Comment: Line 19 on the Schedule E reflects the total amount paid for the maintenance and upkeep of the property. This also includes mortgage interest and taxes. These expenses must be subtracted from income. Cell: B43 Comment: The net rental income/loss will be automatically calculated.

Note: Please refer to Fannie Mae's guidelines on calculating rental income and handle the income/loss and the PITIA on the rental properties accordingly. Cell: B44 Comment: Section 179 property is property that was purchased for the active use by the trade or business. Part or all of the cost of the section 179 property may be expensed in the year in which it was placed in service. The taxpayers share of the section 179 expense may be added back to income. Cell: B45 Comment: The borrowers share of partnership or S corporation income or loss is reported here. This amount should be considered in determining qualified income.

Cell: B46 Comment: Depreciation is a non-cash business expense that is allocated over the useful life of an asset. Depreciation can be added back to income. Cell: B47 Comment: Other income/expenses may added or subtracted to income such as amortization.

Cell: B48 Comment: The total income/loss will be automatically calculated in each column.

Cell: B49 Comment: The total income/loss for each column is totalled automatically and populated in Section A in the Grand Total section on the bottom of page 2.

Cell: B54 Comment: Depreciation is a noncash business expense that is allocated over the useful life of an asset. Financial capacity of the business should be evaluated to ascertain that depreciated assets can be replaced as needed. If the business proves financial capacity, depreciation can be added to income as it is a noncash expense. Cell: B55 Comment: Depletion is a noncash expense reflecting the decrease of a non-renewable resource. If the depletion of this resource will not adversely impact future business operations, the amount of depletion allowance can be added to income. Cell: B56 Comment: Morgage, notes, bonds payable may be a single payment note or have a renewal option. The actual working capital needed daily by the partnership may be affected by these liabilities.

Analysis must be conducted to determine if required repayment of these debts will adversely impact the partnerships cash flow. If there is an adverse impact to the cash flow they must be subtracted from income. Cell: B58 Comment: Analyze other income to determine the probability of continuance and stability.

Cell: B59 Comment: The sub-total of the partnership income is automatically calculated.

Cell: B60 Comment: Enter the partners percent of interest in the business. The sub-total of partnership income is automatically multiplied by the borrowers % of ownership.

Cell: B61 Comment: These payments are made to the partner for services rendered or for the use of capital. Guaranteed payments are made without regard to the partnerships profits and are subject to self-employment tax by the partner. Analysis must be conducted to determine if this income is consistent and recurring. If so, it may be added to income. Cell: B62 Comment: The total income/loss will be automatically calculated in each column. Cell: B63 Comment: The total income/loss in each column is totalled automatically and populated in Section B in the Grand Total section on the bottom of page 2.

Cell: B66 Comment: Depreciation is a noncash business expense that is allocated over the useful life of an asset. Financial capacity of the business should be evaluated to ascertain that depreciated assets can be replaced as needed. If the business proves financial capacity, depreciation can be added to income as it is a noncash expense. Cell: B67 Comment: Depletion is a noncash expense reflecting the decrease of a non-renewable resource. If the depletion of this resource will not adversely impact future business operations, the amount of depletion allowance can be added to income. Cell: B68 Comment: Morgage, notes, bonds payable may be a single payment note or have a renewal option. The actual working capital needed daily by the S Corporation may be affected by these liabilities. Analysis must be conducted to determine if required repayment of these debts will adversely impact the S Corporation's cash flow.

If there is an adverse impact to the cash flow they must be subtracted from income. Cell: B70 Comment: Analyze other income to determine the probability of continuance and stability.

Cell: B71 Comment: The sub-total of the s coporate income is automatically calculated.

Cell: B72 Comment: Enter the shareholders ownership interest in the business. The total shareholder's income is automatically multiplied by the shareholder's % of ownership, which determines the percentage of profit or loss to be distributed by the S Corporation. Cell: B73 Comment: The total income/loss will be automatically calculated in each column.

Cell: B74 Comment: The total income/loss in each column is totalled automatically and populated in Section C in the Grand Total section on the bottom of page 2. Cell: B77 Comment: Depreciation is a noncash business expense that is allocated over the useful life of an asset. Financial capacity of the business should be evaluated to ascertain that depreciated assets can be replaced as needed. If the business proves financial capacity, depreciation can be added to income as it is a noncash expense. Cell: B78 Comment: Depletion is a noncash expense reflecting the decrease of a non-renewable resource. If the depletion of this resource will not adversely impact future business operations, the amount of depletion allowance can be added to income. Cell: B79 Comment: Net operating loss is a loss that was carried forward from previous years generally used to reduce future tax payments. The net operating loss is a non-cash loss for the year it is claimed since the loss was experienced in a prior year. It may be added back to income; however, careful analysis should be conducted as to the nature of the loss and whether is has any negative impact to future profits. Cell: B80 Comment: This is the corporations taxable income and should be added back to corporate income.

Cell: B81 Comment: This is the tax incurred by the corporation. You must subtract from the corporations taxable

income. Cell: B82 Comment: Morgage, notes, bonds payable may be a single payment note or have a renewal option. The actual working capital needed daily by the Corporation may be affected by these liabilities. Analysis must be conducted to determine if required repayment of these debts will adversely impact the Corporation's cash flow. If there is an adverse impact to the cash flow they must be subtracted from income. Cell: B84 Comment: Analyze other income to determine the probability of continuance and stability.

Cell: B85 Comment: The sub-total of the corporate income is automatically calculated.

Cell: B86 Comment: Enter the shareholders ownership interest in the business. The total shareholder's income is automatically multiplied by the shareholder's % of ownership, which determines the percentage of profit or loss to be distributed by the Corporation.

Cell: B87 Comment: The total income/loss will be automatically calculated in each column.

Cell: B88 Comment: The total income/loss in each column is totalled automatically and populated in Section D in the Grand Total section on the bottom of page 2. Cell: E90 Comment: Income/Loss from the 1040s. Cell: E91 Comment: Income/loss generated from the partnership. Cell: E92 Comment: Income/loss generated from the s corporation. Cell: E93 Comment: Income/loss generated from the corporation. Cell: E94 Comment: Grand total of all income for all years calculated. Cell: D95 Comment: Enter the number of months used in qualifying. Cell: E96 Comment: Total monthly qualifying income.