What type of income qualifies for a USDA Loan?
How do you qualify for a USDA loan with income from tips, bonuses, commissions, and part-time employment?
What type of income can qualify for a USDA loan? As we all know, types of employment can vary from buyer to buyer, and in many cases, it ranges with income from tips, bonuses, commissions, and even part-time employment.
With that being said, what are the USDA income qualifying guidelines for this type of income to be used? In order to maximize your USDA sales price limit, it is critical to calculate all available income in order to make the most out of USDA loan qualification.
In today’s article, I will break down the specifics of all income types that qualify for a USDA loan.
However, before we get started, feel free to download our USDA Blueprint for Success with the link below. This educational resource is designed to help homebuyers and their agents stay out of trouble – before it sneaks up on you!
What type of income qualifies for a USDA Loan?
USDA Income Reminders:
- Annual income is the term used when calculating USDA Income Eligibility Limits (Household Income)
- Repayment income is the amount used for calculating eligible income for USDA loan qualifying
Generally speaking, USDA Guidelines will require a one-year history from employments where income is earned from tips, bonuses, commissions, and part-time employment.
Although ideally earned from the same place of employment, this type of income is not required to be from the same employer, but USDA qualifying guidelines will require that income from these sources be likely to continue into the future as well.
For overtime and bonus income specifically, USDA guidelines state: “Underwriters must analyze overtime for the current pay period, and YTD earnings. Significant variances (increase or decrease) of 20 percent or greater in income from the previous 12 months must be analyzed and documented before considering the income stable and dependable.”
Additionally, applicants with a sole source of unemployment benefits are not eligible for a USDA Guaranteed Loan.
Moreover, as discussed in a previous video tip, if unreimbursed business expenses are claimed on your tax returns (Form 2106) then this amount will be deducted from both your repayment income and annual income.
The current Florida USDA annual income limits can be found here.
We Are Happy To Help
We realize USDA qualifying guidelines can be complicated, but that is where we step in to help. My team is built to help walk homebuyers through the USDA process step by step.
Just simply call or email to discuss your scenario, schedule a convenient callback time, or complete our 1-2-3 online pre-qualifier to get started.
(800) 806-9836 Ext 280
SeanS@MPLX.org
I want everyone to make it a great day, and look forward to seeing you right here for the next tip of the week!
P.S. Don’t forget to download our USDA Blueprint for Success with the link below!
