# Income Requirements

What it controls: Minimum gross monthly income required as a multiple of rent.

Default Setting: 3x monthly rent

Common Range: 2x to 3x monthly rent

Example: For a $2,000/month rental at 3x:

* Required monthly income: $6,000
* Required annual income: $72,000

#### Why Gross Income (Not Net)

Gross income is the simplest and most widely accepted way to measure income for qualification purposes. It’s the figure used in employer-issued pay stubs, employment verification forms and offer letters, and mortgage industry income calculations. Using gross income provides a clear and consistent baseline for evaluating all applicants, which is essential for fair and reliable screening.

1. Consistency: Net income can cary widely based on several factors:
   1. Federal and state tax withholding elections
   2. Pre-tax benefit contributions (401k, HSA, FSA)
   3. Post-tax deductions that vary by employer
   4. State tax differences
2. Industry Standards and Risk Models: Industries that rely on income-to-obligation ratios use gross income as the baseline metric. This ensures:
   1. Predictable and consistent risk modeling
   2. Simple, transparent qualification ratios
   3. Alignment with broader financial and housing industry practices
3. Fairness: Net income varies based on personal decisions that don’t reflect ability to pay. Gross income avoids those differences by preventing applicants from being penalized for:
   1. Choosing to save for retirement or contribute to an HSA/FSA
   2. Carrying health, dental, or vision insurance
   3. Supporting dependents through higher benefit or tax elections

Alternative: If you're concerned about take-home pay, increase your gross income multiplier (e.g., from 3x to 3.5x) rather than switching to net income calculations.


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