Co-borrower is unemployed and receiving unemployment. This alone can't be used as a turndown reason on a loan, correct?

Correct - but the lack of anticipated future income can be used if the current benefits expire before the loan would mature. .

If application is joint, and the primary applicant (who is employed) qualifies under bank's lending guidelines on her own, then we have no grounds for turning down this loan because the co-applicant is unemployed/receiving unemployment even if the benefits expire before the loan would mature. Is that correct?

That would be correct. If the primary applicant can qualify without the income of the co-applicant, whether their income continues is sort of a moot point.

Thank you. And if this was an individual applicant and we find out the unemployment is only scheduled to continue for 2 more months and the loan term requested is 5 years, and thus we know the probably continuance of this income is not likely to continue - so we want to turn down, what turndown reason should be used in this type of situation? "Other" - and then specify?? The temporary or irregular employment turndown reason speaks to seasonal employment, or hours and salary fluctuating significantly.

Do you not have employment requirements in your underwriting criteria. Unable to very employment would be a reason if you do. Or Other and "Future income could not be verified". It really comes down to specifically why they fail your normal underwriting criteria.