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What type of income qualifies for a USDA Loan?

October 19th, 2018 by Sean Stephens

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 your USDA loan qualification.What are Florida USDA Income Limits

In today’s short video I will break down the specifics so you will be in the know and  help keep your transaction from falling off the tracks.

However, before we get started, feel free to download our USDA Blueprint for Success with the link below. This educational resource is designed 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:Tampa FL USDA Approved Lender List

  • 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 two 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: “If either type of income shows a continual decline, the lender must provide a sound rationale for the amount included. If bonus income varies significantly from year to year, a period of more than two years may be used in calculating the average income.”Tampa FL USDA Approved Lender List

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.

As I recently reported, the 2018 Florida USDA annual income limits have been increased with details as follows

2018 Florida USDA Income Limits

 

 

2018 USDA Income Limits

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 call back 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!

Sebring FL USDA Home Loans

 

 

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