Tag: grossing up

VA – Grossing Up Disability Income

Question: Can VA Disability Income be grossed up, and if so, how much? Answer: The IRS website indicates that VA Disability is exempt from federal income tax. The guideline below from the Lenders Handbook explains that while non-taxable income can be grossed up, it can only be grossed up for calculating the DTI. It cannot be used […]

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VA – Grossing Up Non-Taxable Income: It seems like the new guideline in Chapter 4 contradicts itself regarding grossing up income. What is the rule? Grossing Up Income Chart

Answer: The new guideline is supposed to read “use 125%”.  This is what they announced as their new policy back in April 2018 at the VA Lenders Conference.  It appears that when they edited the Chapter, they added in the new policy, but forgot to delete the old one.  Anytime this happens, you can expect that […]

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