A borrower applied for a new loan to purchase a home (1st mortgage term note). Her income is considered moderate and she cash flows for the payments but she applied with her father as a guarantor (he is an existing client of the bank) because she is a recent college grad and has a lot of school debt that kept her from qualifying for a conventional mortgage. If her father guarantees the loan, do we use his income too even if she cash flows the payments and his guarantee is an abundance of caution?

Did you mean to post this in the HMDA forum?

From the GIR: pg. D-10

Income data—income relied on. An institution reports the gross annual income relied on in evaluating the creditworthiness of applicants. For example, if an institution relies on an applicant’s salary to compute a debt-to-income ratio but also relies on the applicant’s annual bonus to evaluate creditworthiness, the institution reports the salary and the bonus to the extent relied upon. Similarly, if an institution relies on the income of a cosigner to evaluate creditworthiness, the institution includes this income to the extent relied upon. But an institution does not include the income of a guarantor who is only secondarily liable.