Q&A - December 25, 2016

USDA – Tax Transcripts – Unable to Verify: Will USDA make an exception if the transcripts are not on file yet with the IRS, for a W2 employee?

Answer: Yes, USDA RD does make allowances for cases where IRS documentation is incomplete or unavailable. Please see the attached reference below. Download Resource: USDA RD 3555 – Validating Household Income. Copyright – 2016 – MortgageCurrentcy.com A subscription is required to access this content—please view our available subscription options. If you are a current subscriber, please [...]

2018-10-27T22:06:04-05:00November 3rd, 2017|

VA – Separation Agreement – Debts Used to Qualify: If I have legal documentation showing a former spouse is liable for debt, do I need to count that against the borrower?

Answer: Divorcing or separated clients have some complexities that I’m able to guide your clients through. Don’t let misinformation kill the deal! I have to preface this answer with a disclaimer that I am not an attorney and am providing information to the best of my knowledge within the scope of VA underwriting guidelines and [...]

2017-12-27T12:17:37-05:00November 3rd, 2017|

FHA – 2106 Unreimbursed Business Expenses-Income Calculation: When should I subtract the unreimbursed business expenses from the 2106 from a client’s income?

Answer: As an underwriter, this topic makes me nuts, because FHA has written a completely contradictory guideline on commission income. Part 1: First, they tell you that you only need tax returns if the borrower earns commission income greater than 25% of their total earnings. Their exact wording is “MUST use traditional or alternative employment [...]

2017-12-27T12:17:37-05:00November 3rd, 2017|

FHA – Calculation of Rental Income/Loss-Schedule E: What numbers do I use on the Schedule E to compute a rental income or loss?

Answer: Use the net rental income amount on Schedule E, Line 21 and add back in depreciation. Also, add back in any mortgage interest, taxes, etc. so that you aren’t ‘double counting’ them when you deduct the mortgage payment and taxes, etc. on the 1003 for your income calculation. Reference: 4000.1 II.A.4.c.xii.(I)(3)(c) History of Net [...]

2017-12-27T12:17:37-05:00November 3rd, 2017|