What Is the Cash Flow Analysis Form (Form 1084)?
The Cash Flow Analysis Form, also called Form 1084, is a standard Fannie Mae worksheet. Lenders and underwriters use it to calculate a self-employed borrower's qualifying monthly income. It takes figures from the borrower's two most recent Form 1040 tax returns and adjusts them. Non-cash expenses like depreciation are added back to income. Non-recurring amounts such as one-time gains are removed. The final result is a reliable monthly income figure used for mortgage loan qualification.
How to Complete Form 1084: Step-by-Step
Follow these steps to fill out the Cash Flow Analysis Form accurately:
- Gather the borrower's tax documents. Collect Form 1040 and all attached schedules for the past two tax years.
- Enter base income. Record wages, salaries, and tips from line 1 of Form 1040.
- Add back non-cash deductions. Include depreciation, depletion, and amortization amounts. These do not represent real cash outflows and are added back to income.
- Remove nonrecurring income. Exclude one-time gains, insurance proceeds, and other unstable income that cannot be relied on for loan repayment.
- Calculate each year separately. The form includes two columns, one for each tax year, to track income changes over time.
- Average both years. Divide the two-year total by 24 to get the monthly qualifying income used in the debt-to-income ratio calculation.
Related Income Analysis Forms
Underwriters commonly use these forms alongside the Cash Flow Analysis Form in mortgage files:
- Self-Employed Income Analysis - a detailed worksheet for calculating income from self-employment schedules
- Business Income Worksheet - used to evaluate income from partnerships and S-corporations
- Fannie Mae Income Worksheet - the companion form for W-2 borrower income analysis
- Monthly Cash Flow Plan - a budgeting tool used as supporting loan file documentation
Frequently Asked Questions About Form 1084
Who fills out the Cash Flow Analysis Form? Mortgage lenders and underwriters complete Form 1084 using the borrower's tax documents. Borrowers do not fill it out themselves.
When is Form 1084 required? It is required when qualifying income includes self-employment earnings, partnership income, S-corporation distributions, or rental income reported on Schedule E.
How many years of tax returns does Form 1084 cover? Most lenders require two years of Form 1040 returns. The form has separate columns for each year to compare income and confirm stability.
Does Form 1084 apply to FHA loans? Fannie Mae created Form 1084 for conventional loans. FHA and VA lenders typically use equivalent cash flow worksheets that follow the same income analysis methodology.