COVID Stimulus Payments and Mortgages

 In Qualifying for a Mortgage

We are getting a lot of calls asking if people can use their COVID stimulus checks and their income tax refunds as soon as they receive them, or if there is a waiting period before those funds can be used to buy a house.

Here’s what you need to know.


In order to count money towards the purchase of a house when applying for a mortgage, a lender needs to document where the money came from.  The reason for this is if there is no documentation, the lender has no way of knowing if the money is from a source that is not allowed by the mortgage underwriting guidelines, such as a loan from a friend or the profit from an illegal activity.

Borrowed Funds

Loans from friends are not allowed because you will eventually have to pay the loan back, and the lender wants to know that you will be able to pay the mortgage, in addition to the personal loan.  The way lenders do that is by subtracting the loan amount from your available assets.  In other words, you can’t count the money you borrowed from a friend when qualifying for a mortgage.

Illegal Funds

The underwriting guidelines also don’t allow profits from illegal activities to be counted when qualifying for a mortgage.  This may seem silly to most people, but we can assure you, there are plenty of criminals with large deposits in their bank accounts, and they all have to live somewhere.  

Qualifying for a Mortgage

Regarding your COVID stimulus check and tax refund, you can absolutely count that money when qualifying for a mortgage, and all we need is documentation showing where the money came from.  This can be a copy of the check, or if you had those funds deposited directly into your bank account, a copy of your bank statement, showing the deposit came from the US Treasury.

If you have any questions about mortgages, or if you want to get pre-approved to purchase a house or refinance your existing mortgage, contact us today and see how easy it is to get a loan.

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