America: What a Country!?!?!?...Welfare Payments Can Be Used to Qualify for a Mortgage

The Russian comedian Yakov Smirnoff had a famous tag line as part of his routine: "America: What a country!".

The following is not a joking matter, but it will leave you asking "America: what a country!?!?!?"

John Lott's commentary points out this official Federal Reserve policy statement in the regulation guidlines found in {Closing the Gap:} A Guide to Equal Opportunity Lending (page 16: emphasis added):

..Sources of Income: In addition to primary employment income, Fannie Mae and Freddie Mac will accept the following as valid income sources: overtime and part–time work, second jobs (including seasonal work), retirement and Social Security income, alimony, child support, Veterans Administration (VA) benefits, welfare payments, and unemployment benefits...

The Boston Fed's website includes this introduction to the report:

This publication offers a program for financial institutions seeking to apply their mortgage lending standards in accordance with equal opportunity goals and to expand their activity in underserved minority markets. Banks, mortgage companies, and other lenders subject to the Home Mortgage Disclosure Act (HMDA) are referred to as “financial institutions” or “lenders.” Specific recommendations are followed by the Federal Reserve Bank of Boston’s conclusions with respect to fair lending challenges. The recommendations are geared primarily to mortgage products but they may be modified to address small business, commercial, and consumer lending. A summary of fair lending laws is also provided.