Note Receivable Income and Mortgage Qualification

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Note Receivable Income and Mortgage Qualification

Note receivable income may be used for mortgage qualification when the borrower has a properly documented promissory note, an acceptable payment history, and sufficient payments remaining after closing.

A note receivable is a legal agreement requiring another person or business to repay money owed to the borrower.

Common examples include:

Seller financing from a previous real estate sale
Installment payments from the sale of a business
A privately financed property loan
A loan the borrower made to another person
Payments from the sale of personal property
An installment sale of business assets
Certain structured repayment arrangements

Having a signed note is not enough by itself.

For conventional mortgage qualification, the lender generally needs to establish:

The required monthly payment
The payment frequency
The remaining term
At least 12 months of full, regular, and timely payments
Evidence that the income will continue for at least three years
Consistency between the note and the actual payments received

A recently created note generally cannot be used immediately as stable mortgage income, even if the borrower has already received several payments.

What Is Note Receivable Income?

Note receivable income is money received under a legally enforceable promise to repay a debt.

The borrower applying for the mortgage is the payee or lender under the note. The person or business making payments is the maker, obligor, or payer.

A promissory note may identify:

Original principal balance
Interest rate
Payment amount
Payment frequency
Payment due date
Amortization schedule
Maturity date
Balloon payment
Late-payment provisions
Prepayment rights
Collateral securing the obligation
Default remedies

For mortgage qualification, the promissory note establishes what is legally owed. The payment history establishes whether the borrower is actually receiving it.

Both are important.

Common Sources of Note Receivable Income

Note receivable income may result from several types of transactions.

Seller Financing

A property owner may sell real estate and finance part or all of the buyer’s purchase price.

Instead of receiving all proceeds at closing, the seller receives:

A down payment
Monthly principal and interest
A balloon payment in the future
Another negotiated payment structure

The former seller becomes the holder of a note receivable.

This income may potentially be used for a future mortgage if the payment history and remaining term satisfy the applicable requirements.

Business Sale

A business owner may sell a company and accept installment payments from the buyer.

The transaction may include:

Cash at closing
A promissory note
An earnout
Consulting income
Continued salary
Retained equity
Payments tied to future business performance

Only the portion represented by an enforceable note should be analyzed as note receivable income.

An earnout dependent on future revenue or profits may require different treatment because payment is not necessarily guaranteed.

Private Loan

A borrower may have lent money to:

A family member
A business
A former business partner
An investor
Another third party

If repayment is governed by a promissory note and the borrower has received timely payments for the required period, the income may potentially be considered.

An informal arrangement without a signed note is generally more difficult to use.

Installment Sale

A borrower may sell an asset and receive the proceeds over time.

Possible assets include:

Real estate
Business equipment
Company ownership
Agricultural property
Other valuable personal property

The lender must determine whether the installment payments are governed by a qualifying note and will continue for the required period.

Note Receivable Income Is Different From Interest Income

A note payment may contain both:

Return of principal
Interest income

For tax purposes, these components may be treated differently.

For mortgage qualification, Fannie Mae’s note receivable guidelines generally permit the documented monthly payment amount to be considered when all requirements are met.

This differs from traditional interest income earned from:

Savings accounts
Certificates of deposit
Bonds
Brokerage accounts
Money market accounts

See Interest and Dividend Income for Mortgage Qualification for income earned from financial assets rather than a private repayment agreement.

Note Receivable Income Is Different From Capital Gains

A note may originate from the sale of an appreciated asset.

That transaction can create:

Capital gains
Interest income
Return of principal
Monthly note payments

These are not necessarily the same income source.

For example, selling a business may generate a capital gain for tax purposes while the buyer repays the purchase price through a promissory note.

The lender must avoid counting the same transaction multiple times as:

Capital gains income
Notes receivable income
Interest income
Business-sale proceeds
Available assets

See Capital Gains Income and Mortgage Qualification for recurring gains from asset sales.

A 12-Month Payment History Is Required

Under Fannie Mae’s current note receivable income guidelines, the lender must document at least 12 months of receipt.

The history must show:

Full payments
Regular payments
Timely payments
Consistency with the promissory note

Payments from a note executed within the past 12 months cannot be used as stable income, regardless of the note’s total duration.

That means a 20-year note created six months ago generally does not qualify simply because it has a long remaining term.

The borrower must first establish the required 12-month receipt history.

Why the Note Must Be at Least 12 Months Old

A newly executed note shows what the payer agreed to do.

It does not yet establish that the payer will reliably perform.

The 12-month history allows the lender to evaluate whether the payer has consistently made:

The correct payment
On the correct schedule
Without material interruptions
Without recurring lateness
Without undocumented modifications

A large original balance or strong collateral does not eliminate the history requirement under Fannie Mae’s standard guidelines.

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What Documents Are Required?

Fannie Mae generally requires:

A copy of the promissory note
Evidence showing receipt of payments for the most recent 12 months

Proof of receipt may include:

Bank statements
Canceled checks
Electronic payment records
Servicing statements
Payment ledgers
Other acceptable evidence of payment

Additional documentation may include:

Amortization schedule
Deed of trust or mortgage securing the note
Business-sale agreement
Real estate closing statement
Assignment of the note
Loan-servicing records
Modification agreement
Tax returns
Form 6252 for an installment sale
Forms 1099-INT
Evidence of the current unpaid balance
Payoff statement
Documentation explaining irregular payments

The precise documentation depends on the transaction.

The Promissory Note

The lender needs the complete executed note—not merely a summary of the agreement.

The note should clearly establish:

The parties
The amount owed
The payment amount
Payment frequency
Payment term
Interest rate
Maturity date
Any balloon payment
Prepayment terms
Default provisions

If the note has been modified, the lender may need:

The original note
Every modification
Current payment terms
Evidence that all parties accepted the changes

An unsigned draft or informal payment schedule may not establish an enforceable obligation.

Proving the Payment History

The lender must connect the note’s required payments with the borrower’s actual receipts.

For example, if the note requires $3,000 on the first day of each month, the lender should be able to identify corresponding payments.

Acceptable evidence may include:

Deposits into the borrower’s bank account
Copies of deposited checks
Automated Clearing House transfers
Wire-transfer records
Third-party servicing statements
Other traceable electronic payments

Cash payments are more difficult to document because they may not create a reliable third-party record.

A borrower receiving cash should deposit it consistently and retain documentation, although a lender may still apply additional requirements.

Payments Must Be Full

A payment history may not satisfy the requirement when the borrower regularly receives less than the amount due.

Suppose the note requires $4,000 per month, but the payer has consistently sent $3,000.

The lender should not assume the missing $1,000 will begin arriving after closing.

Possible outcomes include:

Using the actual documented amount if supported by a formal modification
Requiring the note to be brought current
Excluding the income
Obtaining additional documentation
Applying another lender’s guidelines

An undocumented verbal agreement does not necessarily change the written note.

Payments Must Be Regular

Payments should follow the frequency established in the note.

Examples include:

Monthly
Quarterly
Semiannual
Annual

A note does not necessarily need monthly payments, but the lender must be able to convert the documented payment schedule into a qualifying monthly amount when permitted.

Irregular payments may create a problem if the note requires a regular schedule.

For example:

Several months with no payment
Two payments received together
Changing payment amounts
Unexplained lump-sum deposits
Payments from multiple unrelated accounts

The borrower may need to explain and document the pattern.

Payments Must Be Timely

The payment history should demonstrate that the payer follows the due dates established in the note.

Occasional minor timing differences may require explanation.

Repeated late payments may indicate that the income is not stable.

The underwriter may evaluate:

Number of late payments
Length of each delay
Whether late charges were assessed
Whether the note is currently delinquent
Whether payments were skipped
Whether the borrower granted forbearance
Whether a modification occurred

A payment eventually received is not always equivalent to a timely payment.

The Income Must Continue for at Least Three Years

Fannie Mae requires note receivable income to continue for at least three years from the mortgage note date.

The mortgage note date is associated with the new mortgage being obtained—not the date the original private note was created.

For example:

New mortgage note date: October 1, 2026
Private note matures: November 1, 2029

The private note continues for more than three years and may satisfy the continuance requirement.

If the private note matures on June 1, 2029, it would end less than three years after the new mortgage note date and may not qualify.

The Three-Year Requirement Moves With the Closing Date

A note may satisfy continuance at preapproval but fail it if the mortgage closing is delayed.

For example:

Note maturity date: December 1, 2029
Expected mortgage closing: November 1, 2026
Remaining term: 37 months

If closing moves to February 1, 2027, only 34 months remain.

The income may no longer satisfy the three-year requirement.

This should be reviewed before the borrower enters a purchase contract.

Balloon Payments

A balloon note has a large remaining balance due before the loan would otherwise fully amortize.

For example:

Monthly payment: $5,000
Remaining amortization: 15 years
Balloon due: 30 months from closing

Although the monthly payments may appear stable, the balloon terminates the scheduled income inside the required three-year period.

The lender generally cannot assume:

The payer will refinance
The note will be extended
The borrower will reinvest the balloon proceeds
A replacement monthly income stream will be created

A promised future extension should be formalized and reviewed before relying on the income.

Interest-Only Notes

A note may require interest-only payments followed by a balloon.

The lender must examine:

Monthly interest payment
Interest-only period
Maturity date
Balloon date
Prepayment rights
Remaining principal balance

If the payment continues for at least three years and the borrower has the required history, the monthly amount may potentially be used.

However, a balloon occurring within three years can prevent qualification.

Notes With Annual Payments

A note may require one payment per year rather than monthly payments.

The lender may need to determine whether:

At least 12 months of receipt has been documented
The annual payment pattern is regular
More than one payment is necessary under the selected program
The remaining term satisfies continuance
The annual amount can be converted to a monthly figure

For example:

Documented annual payment: $60,000
Potential monthly equivalent: $5,000

The lender should confirm the treatment before relying on an annual note for preapproval.

Notes With Variable Payments

Some notes require payments that change based on:

A stated schedule
An adjustable interest rate
Business revenue
Investment performance
Seasonal cash flow
A percentage of proceeds

A payment tied to business performance may be more difficult to treat as stable note receivable income than a fixed contractual payment.

The lender may need to determine whether the payment is:

A true debt obligation
An earnout
Contingent compensation
A royalty
Business income
Another type of payment

If the amount is not fixed, an additional history or conservative calculation may be required.

Earnouts Are Not Always Notes Receivable

An earnout from the sale of a business may depend on future:

Revenue
Profit
Customer retention
Performance milestones
Continued employment
Other contingencies

Because payment is conditional, an earnout may not provide the same certainty as an unconditional promissory note.

The lender should review the business-sale agreement to determine whether the payment is:

Legally owed regardless of performance
Conditional
Guaranteed
Subject to offset
Dependent on continued services
Expected to continue for three years

An earnout should not automatically be entered as note receivable income.

Seller-Financed Real Estate Notes

A seller-financed note may be secured by:

A deed of trust
A mortgage
Another recorded lien
The property sold

The lender may request:

Promissory note
Deed of trust or mortgage
Closing statement from the original sale
Payment history
Current unpaid principal balance
Servicing statement
Evidence of lien recording

A secured note may provide additional protection to the borrower receiving payments, but collateral does not replace the 12-month payment history or three-year continuance requirement.

Unsecured Notes

An unsecured note is not backed by specific collateral.

Fannie Mae’s core note receivable guidance focuses on the note, receipt history, stability, and continuance. It does not state that every acceptable note must be secured.

However, individual lenders may evaluate unsecured notes more conservatively.

The underwriter may consider:

Identity of the payer
Payment performance
Enforceability
Remaining term
Modification history
Documentation quality
Lender overlays

A verbal promise to repay money is not the same as a documented unsecured promissory note.

Notes From Family Members

A note receivable from a relative may potentially create legitimate income, but the relationship may lead to additional scrutiny.

The lender may need to establish:

The note is legally enforceable
The original transaction was legitimate
Payments are actually made by the relative
Funds are not being circulated back to the payer
Payments are full, regular, and timely
The arrangement was not created solely for mortgage qualification
The income will continue for three years

A recently created family note generally cannot overcome the 12-month history requirement.

Notes From a Business the Borrower Still Owns

A business owner may receive payments from a company in which the borrower retains ownership.

The lender must avoid double-counting.

The payment might represent:

Loan repayment
Salary
Distribution
Owner draw
Return of capital
Interest income
Another business transaction

The lender may need:

Business tax returns
Personal tax returns
Balance sheets
The promissory note
Evidence of the original loan to the business
Proof of repayment
Business cash-flow analysis

If the borrower controls both sides of the transaction, the lender may apply additional scrutiny to determine whether the income is independent, sustainable, and not already included elsewhere.

Note Income After Selling a Business

A former business owner may depend on a buyer’s monthly payments after the sale.

The lender should evaluate:

The promissory note
Twelve-month payment history
Remaining payment term
Whether payments are contingent
Whether a balloon is scheduled
Whether the former owner retains obligations
Whether consulting income also exists
Whether the purchaser’s payment has remained timely

The sale proceeds may be substantial, but the prior business income may no longer continue.

The new mortgage approval must be based on income available after the sale.

Does the Payer’s Credit Need to Be Reviewed?

Fannie Mae’s standard note receivable guidance does not describe a general requirement to obtain the payer’s credit report.

The primary requirements are:

A copy of the note
Twelve months of full, regular, and timely receipt
At least three years of continuance

However, a lender may request additional documentation when the note or payment history raises concerns.

The borrower should not assume that the payer becomes a mortgage applicant merely because the note income is being used.

What If the Note Was Modified?

A modification may change:

Payment amount
Interest rate
Payment frequency
Maturity date
Balloon date
Remaining balance
Late-payment treatment

The lender needs the final enforceable terms.

If a modification occurred recently, the underwriter may consider whether:

The earlier payments remain representative
A new 12-month history is needed
The payment decreased
The payer had financial difficulty
Continuance has been extended
The modification was executed only to support mortgage qualification

A lender should not rely on the original note when a later agreement changed the obligation.

What If the Note Was Recently Extended?

Suppose the original note would end in 24 months, but the parties sign an extension creating a new five-year term.

The extension may solve the contractual continuance issue, but it does not automatically resolve every underwriting concern.

The lender may evaluate:

When the extension was executed
Whether the new terms are enforceable
Whether payment amount changed
Whether the payer agreed before the mortgage application
Whether the modification reflects actual performance
Whether lender overlays apply

A last-minute extension can receive additional scrutiny.

What If the Payer Pays Off the Note Early?

Many promissory notes permit prepayment.

If the note is paid off before the mortgage closes, the monthly note income ends.

The borrower may then receive a lump sum that could potentially be used as:

Cash to close
Financial reserves
Investment assets
Funds for an asset-depletion program

The payoff does not automatically create replacement monthly income.

The lender must recalculate qualification if the note income was necessary for approval.

Can the Note Be Sold?

A borrower may sell or assign a note to an investor for a lump sum.

The note may sell at:

Face value
A discount
A premium

Once sold, the borrower generally no longer receives the monthly payments.

The proceeds may become an asset, but the note receivable income ends.

A borrower should not sell a note during underwriting without discussing the effect on qualification.

Tax Returns and Note Receivable Income

Note payments may have several tax components:

Interest income
Return of principal
Capital gain
Installment-sale income
Depreciation recapture
Other taxable amounts

Relevant documents may include:

Form 1040
Schedule B
Schedule D
Form 6252
Form 1099-INT
Schedule K-1
Business tax returns

Fannie Mae’s notes receivable guidance focuses on the documented monthly note payment rather than requiring a two-year tax-return history.

However, tax returns may still be needed for:

Other income sources
Self-employment
Installment-sale analysis
Resolving inconsistencies
Lender overlays
Automated underwriting findings

Tax treatment and mortgage treatment are related but not identical.

Is Note Receivable Income Taxable?

The full note payment is not necessarily taxable income.

A payment may include:

Principal repayment
Taxable interest
Capital gain
Another tax component

The borrower should consult a qualified tax professional about the correct treatment.

For mortgage qualification, a lender should not assume that the entire payment is nontaxable simply because some of it represents a return of principal.

An income gross-up should only be applied when permitted and properly documented.

See Nontaxable Income and Mortgage Qualification.

Does Note Receivable Income Get Averaged?

Under Fannie Mae’s current guidelines, the documented monthly amount may be used when the required payment history, stability, and continuance requirements are met.

This differs from income categories that specifically require a two-year average.

However, irregular or changing payments may require further analysis.

For example:

Contractual payment: $4,000 per month
Actual payment history: $4,000 each month
Remaining term: Five years

The documented $4,000 may potentially be used.

If the payer sends inconsistent amounts, the underwriter may not simply select the highest payment.

Note Receivable Income and Debt-to-Income Ratio

Eligible note receivable income is added to the borrower’s other qualifying income.

The lender then compares the total income with obligations such as:

Proposed mortgage principal and interest
Property taxes
Homeowners insurance
Flood insurance
HOA dues
Car loans
Credit-card minimum payments
Student loans
Personal loans
Other mortgages
Alimony or support obligations
Business-related debts attributed to the borrower

For example:

Employment income: $7,000
Note receivable income: $3,000
Total qualifying income: $10,000

The lender evaluates monthly debts against the $10,000 total, subject to the selected program’s requirements.

See Mortgage Debt-to-Income Ratio Explained.

Note Receivable Income and Financial Reserves

The unpaid balance of a private note is not necessarily treated like cash in a bank account.

A note may be:

Illiquid
Difficult to sell
Subject to default risk
Worth less than its face amount
Secured by uncertain collateral
Restricted from assignment

The lender may use the monthly note income while declining to count the unpaid balance as liquid reserves.

If the note is sold, the documented net proceeds may potentially become an eligible asset—but the monthly income would end.

See Mortgage Reserve Requirements Explained.

Conventional Loan Requirements

Fannie Mae’s standard note receivable income requirements generally include:

A copy of the note
At least 12 months of documented receipt
Full payments
Regular payments
Timely payments
A note executed at least 12 months ago
At least three years of continued payments after the new mortgage note date
Use of the documented monthly payment amount

Freddie Mac may apply different documentation or calculation requirements.

Individual lenders may also impose overlays.

FHA Loan Requirements

FHA financing may permit note receivable income when the lender determines that it is stable, documented, and expected to continue.

The lender may request:

Promissory note
Payment history
Bank statements
Amortization schedule
Evidence of remaining term
Tax returns
Security documentation

FHA requirements should be reviewed independently rather than assuming they match Fannie Mae’s 12-month history and calculation exactly.

VA Loan Requirements

VA financing may allow properly documented note receivable income when the lender considers it stable and reliable.

VA underwriting also evaluates residual income, which considers the income remaining after major obligations and estimated living expenses.

A veteran may combine note income with:

Military income
VA disability compensation
Military retirement
Civilian employment
Social Security
Other acceptable income

USDA Loan Requirements

USDA financing may evaluate note receivable income for:

Mortgage repayment qualification
Annual household-income eligibility

The same income source can affect both calculations differently.

The lender must evaluate:

Payment history
Continuance
Household income
Program income limits
Property eligibility
Other USDA requirements

Jumbo and Portfolio Loan Requirements

Jumbo and portfolio lenders may offer different treatment for private notes.

Possible differences include:

Longer required payment history
Shorter or longer continuance requirements
Discounting of the monthly payment
Review of the payer’s financial capacity
Requirement that the note be secured
Additional reserve requirements
Alternative treatment of balloon payments

A borrower relying heavily on note income should have the actual note reviewed before selecting a jumbo lender.

Documents a Borrower May Need

A borrower using note receivable income may need:

Complete executed promissory note
Twelve months of bank statements
Twelve months of canceled checks
Electronic payment records
Third-party servicing statements
Payment ledger
Amortization schedule
Current unpaid balance
Deed of trust or mortgage
Evidence that the lien was recorded
Original sale agreement
Real estate closing statement
Business-sale agreement
Note modifications or extensions
Balloon-payment terms
Tax returns when required
Form 6252
Forms 1099-INT
Documentation of any late or missed payments
Evidence showing three years of remaining payments

Not every borrower will need every document.

Real Note Receivable Mortgage Scenarios

Seller-Financed Property With Stable Payments

A borrower sold an investment property three years ago and receives $4,000 per month under a recorded seller-financing note.

The payer has made every payment in full and on time.

The note has six years remaining.

The income may potentially qualify because:

The note is more than 12 months old
At least 12 months of receipt is documented
Payments are full, regular, and timely
More than three years remain

Newly Created 20-Year Note

A borrower sold a business six months ago and receives $8,000 per month under a 20-year promissory note.

Although the note has a long remaining term, it was executed less than 12 months ago.

The income does not satisfy Fannie Mae’s minimum history requirement yet.

Balloon Due in 30 Months

A borrower has received $5,000 monthly for two years, but the note contains a balloon payment due 30 months after the mortgage closing date.

The income does not continue for at least three years and may be excluded.

Several Late Payments

A borrower has received every note payment, but six of the most recent 12 payments arrived more than 30 days late.

The payment history may not demonstrate the required stability.

The lender may request additional documentation or decline to use the income.

Recently Modified Payment

A note originally required $6,000 per month but was modified three months ago to $4,000.

The lender should not continue using $6,000.

The modification and recent payment history must be reviewed to determine the supportable amount.

Business Earnout

A former business owner receives payments only if the business reaches certain revenue goals.

Because the payments are conditional, the arrangement may not qualify as standard note receivable income.

The lender must review the sale agreement and payment terms.

Note Paid Off During Underwriting

A borrower qualifies using $3,500 in monthly note income.

The payer unexpectedly pays the remaining balance in full before closing.

The lender must remove the monthly note income and determine whether the payoff proceeds can support another qualification strategy.

Common Problems That Delay Approval

Note receivable income can delay underwriting when:

The note is less than 12 months old
The borrower provides an unsigned agreement
The note is missing pages
Payment history cannot be traced
Payments are made in cash
Payments are late
Payments are less than the contractual amount
A balloon is due within three years
A recent modification changed the payment
The payer plans an early payoff
An earnout is mistaken for a note
The note belongs to a business or trust
The borrower controls the paying business
The payment is double-counted elsewhere
The remaining term is calculated from the wrong date
The note will mature if closing is delayed
Tax documents conflict with the note

Reviewing the actual note before issuing a preapproval can prevent income from being removed late in the transaction.

Common Misconceptions

“A Signed Note Is Enough.”

The lender also needs at least 12 months of full, regular, and timely payments under Fannie Mae’s guidelines.

“A New 30-Year Note Can Be Used Immediately.”

Payments from a note executed within the last 12 months cannot be used as stable income under Fannie Mae’s standard requirements.

“The Note Only Needs to Continue Until Closing.”

Qualifying payments generally must continue for at least three years from the new mortgage note date.

“A Balloon Payment Counts as Future Monthly Income.”

A balloon ends the recurring payment stream. The lender cannot automatically assume that it will be refinanced or reinvested.

“Every Payment Deposit Is Taxable Income.”

A note payment may contain principal, interest, capital gains, or other components. Tax treatment should be determined separately.

“The Unpaid Note Balance Counts as Cash Reserves.”

A private note may not be sufficiently liquid to qualify as a reserve asset.

“An Earnout Is the Same as a Promissory Note.”

An earnout may depend on future performance and may not represent an unconditional debt obligation.

“Every Lender Uses the Same Guidelines.”

Conventional, FHA, VA, USDA, jumbo, and portfolio lenders may evaluate note income differently.

Real Lender Perspective

Note receivable income often appears stronger on paper than it is under mortgage guidelines.

A borrower may have a legally enforceable 20-year note but only six months of payment history.

Another borrower may have received perfect payments for years, but the note matures 30 months after the proposed mortgage closing.

The strongest file satisfies all three parts:

The written note establishes the payment
The 12-month history establishes performance
The remaining term establishes continuance

Missing any one of those elements can eliminate the income.

Before relying on a note receivable, the lender should review:

Execution date
Payment amount
Payment history
Maturity date
Balloon date
Modifications
Prepayment activity
Identity of the payer
The transaction that created the note

That review should occur before the borrower signs a purchase contract whenever the note income is necessary for approval.

Who This Guide Is For

This guide may be especially helpful for:

Property sellers providing owner financing
Former business owners
Real estate investors
Retired borrowers
High-net-worth families
Borrowers receiving installment payments
Private lenders
Borrowers holding family notes
Trust beneficiaries
Executives who sold business interests
Borrowers receiving payments after a company sale
Texas landowners using seller financing
Borrowers purchasing jumbo properties
Financial advisors helping clients prepare for a mortgage

Final Thoughts

Note receivable income can be used for mortgage qualification when the repayment arrangement is established, documented, and performing as agreed.

Under Fannie Mae’s conventional guidelines:

The lender must obtain the promissory note
At least 12 months of receipt is required
Payments must be full, regular, and timely
A note executed within the last 12 months cannot be used
Payments must continue for at least three years from the new mortgage note date
The documented monthly payment may be used when the requirements are satisfied

A long note term does not replace the required payment history.

A perfect payment history does not overcome a note that matures too soon.

The note, performance, and continuance must all support the income.