As a side note, if your lender did not know to look for that, you may consider looking for a more experienced lender.  As a professional institution that needs to look at tax returns, that is a basic thing that they should know to look for, so it is obvious they are not experienced.  That often results in giving you the run-around and increased frustration on your part.

Tax Guy Bill- I have been a lender for over 15 years (last 5 as a loan officer and previous 10 as a processor) and I just now ran across this for the first time ever. Lenders are not tax preparers, accountants, or CPA's. Also, given that I have done numerous loans for customers that have gone thru school prior to purchasing and have never seen this, I can assume that this is not "basic". No one involved in my current transaction including the buyer, who prepared her own taxes, knew what this code meant.  I was not the lender for the above referenced question, however I do take insult to your comment regarding finding a "more experienced lender". I would not expect you to know and understand all parts of my job as you should not expect as much from lending institutions.

I did not mean to offend you, but I guess I will just have to disagree with you.  In my opinion, if it is your job to do something (including examining a 1040 and telling your client if it is accurate or not), you can't be telling your client it is wrong unless you really know what you are talking about.

For your future reference, there are several other things that could be on Line 7, including foreign earned income (with no W-2) and these other things that are in the instructions:
<a rel="nofollow" target="_blank" href="https://www.irs.gov/pub/irs-pdf/i1040gi.pdf#page=21">https://www.irs.gov/pub/irs-pdf/i1040gi.pdf#pag...>