Before everyone reading this just says, "of course you need a job to get a mortgage, duh," give me a couple of seconds. You need income to get a mortgage loan. It has to be verifiable. It needs to be reliable (expected to continue for at least three years). And it has to be sufficient. What it does NOT have to be is from a job.

Here's an example:

Mr. and Mrs. Smith are retired. They would like to stop renting their third floor apartment and get a house with their daughter, who can help them around the house a bit. The Smiths have no bills and get about $2400 a month in Social Security. They also loaned money to their son and have a note receivable for $40,000. He faithfully pays them $1,000 a month and will continue to for about 5 more years. Their daughter, Sara, works part time from home and earns about $500 a month. She gets another $800 in public assistance and $500 more from her ex-husband to support her small son. She has a $200 a month car payment and a $35 a month credit card payment.

So altogether we have $5,300 a month in income and $235 a month in expenses. If all of this income accepted by the lender, this family qualifies for a purchase of $220,000 with a $216,000 mortgage. Now here's what you have to do to prove the income is viable.

* Social Security: This is the easy one. Provide tax returns and supporting documents. If just starting to receive it, provide a copy of your award letter and a recent check or bank statement showing an automatic payment.

* Income from a note receivable: Provide a copy of the note receivable and copies of banks statements or checks showing that you have been receiving it for at least 12 months. For this reason it's always good to make separate copies of checks from less traditional sources and deposit them separately so they can be easily tracked and proved.

* Public assistance: Disability and welfare benefits must be verified by letters from the paying agency with the amount, frequency and duration of payment specified.

* Part time job: This one may be the toughest to get credit for. If it's a new job in a new field Sara might not be allowed to count the income when pre-qualifying for a home loan. But if it a field she has experience in, or she has been at it for some time (a year or two), or she can get a letter from her employer stating that her employment is expected to continue, she may be able to use the income for qualifying.

* Child support or alimony: This is similar to the note receivable. You need your divorce decree, showing the amounts to be paid and the duration. You also need to prove that Dad isn't a deadbeat and has been paying on time. Again, you can see the importance of making copies of each check and depositing it by itself. Otherwise the underwriter could force you to go hat in hand to the ex and beg for copies of all the canceled checks. Sounds like fun, huh?

In addition, this family (and families like them--maybe YOURS) probably qualifies for a mortgage credit certificate, allowing them to pay less in taxes, keep more income, and qualify for a bigger house. And there's the first-time buyer credit of $7,500. And in many places special programs like Rural Housing that don't even require a down payment.

So while prices are low and financing is cheap, smart families who can live together without driving each other nuts could end up with a smart investment--and the last laugh.