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Different income scenario when getting a VA Home Loan

Different income scenerios when getting a VA Home Loan

  • The lender must verify a minimum of two years of employment.
  • If the applicant has been employed by the present employer for less than two years:


  • Verify prior prior Employment Plus present employment covering a total of 2 years years,
  • Provide an explanation of why 2 years employment could not be verified.
  • Compare any differnt types of employment, verification such as, there verification BOE, consistency,
  • Compare and Clarify any substantial differences in the data that would have been bearing on the qualification of the applicants.

  • General acceptable income verification
  • VA form 26-8497, request for verification of employment or any format which furnishes the same information as VA form 26 - 8497, plus a pay stub if the employer normally provides one to the applicant.
  • If the employer does not indicate the probability of continued employment on the verification of employment VOE, the lender is not required to request any additional on that subject.
  • The BOE must be unoriginal. The pay stub may be an original or copy certified by lenders to be a true copy of the original.

Alternative income verification - alternative documents may be submitted in place of a VOE, If the lender concludes that the applicants income is stable, reliable, and anticipated to continue during the foreseeable future - that is, if the applicant's income qualifies as an effective income. 2 years employment is not required to reach this conclusion.

  • Alternative documentation consist of:
  • Pay stubs covering the last most recent 30-day.
  • WW2 forms for previous two years
  • Telephone verification of the applicants
  • Income of Applicant Employed less than 12 months.
  • Generally, employment less than 12 months is not considered stable and reliable. However, it may be considered stable and reliable if an individual fact warrants such a conclusion
  • .
  • Your lender needs to clarify the lender needs to carefully consider the employer's evaluation of the probability of continued employment, if provided.
  • This generally applies to skilled positions. Examples include nurse, medical technician, lawyer, paralegal, and Computer Systems Analyst.

Note: If the probability of continued employment is high based on these factors, then the lender makes favorable considerations to include the income in the total effective income. Lender must include an explanation of why income of less than 12 months duration was used, must a company that Loan submission.

  • Lenders need to obtain the following documentation:
  • Current financial statements prepared in a General Lee recognize format, including:
  • Year-to-date profit and loss statement; and current balance sheet

Tip: The financial statements must be sufficient for a loan underwriter to determine the necessary information for loan approval. The lender may require an account - prepared financial statements for financial statements audited by a certified public accountant if needed to make sure determination due to the nature of the business or the content of financial statemen

  • Individual income tax returns, signed and dated, plus all applicable schedules for the previous two years or.
  • If needed to demonstrate a satisfactory earnings record.
  • If the most recent years tax return has not been prepared, provide a profit and loss statement for that year, and if the business is a corporation or partnership:
  • Copies of sign Federal Business income tax returns for the previous two years plus all applicable schedules, and a list of stockholders or partner showing the interest each holds in business

Tip: generally, income from self-employed is considered stable when the applicant has been in business for at least 2 years. Less than two years cannot usually be considered stable unless the applicant has previously related employment and / or extensive specialized training. Less than one year can really qualify. In-depth development is required for a conclusion of stable income in less than 1 year cases.

  • Active military and applicants income
  • A military leave and earnings statement Les is required instead of a BOE.
  • The LES must furnish the same information as a VOE.
  • For loans close automatically, the date of the Les Les must be within 120 days of the date that Note is signed 180 days for new construction
  • Construction. For prior loans, of the Apple the applica one 100 construction.

Note: most lenders will want to see a current Les due to military downsizing and many ETFs dates are changing and showing less than 12 months. Oftentimes a statement of service will be required which must show the veteran is active duty and All Dates must be completed. A good example of this is when a battery is being transferred to a new Duty station and purchasing before or at, the time they arrive at their new station. This is the time you take advantage of someone who understands military protocol as a realtor to help you find your home in Maryland. If you're pcsing to Fort me be sure to give me a call 301-337-1999. I'm easy to find and have been selling real estate for over 18 years. I grew up in the area and my family still lives here. I also served in the military with an elite unit. the DNA the government installed in my blood that makes me finish every job possible and leave no one behind. Is the reason why you want to hire me to help find your home when you're pcsing To Fort Meade Maryland, Andrews Air Force Base, Patuxent naval base.

  • Reservist, Guard and Active Duty Applicants
    • The continuation of military pay allowances must be determined to count as income.
    • If the duration of these pay allowances cannot be determined then the pay allowances will only be used to offset intermediate debts of 24 months or less.

  • It is up to the lender to separate the allowances into taxable and tax-free categories. Example basic allowance for housing.
  • Example: basic allowance for housing BAH in basic allowance for subsistence BAS are Allowances that are tax-exempt
  • Example: cost of living allowance COLA is an allowance that is taxable.
  • Rental Homes Near Me

A multi-unit property being purchased for the VA loan must verify the following:

A cash Reserve totaling six months principal interest taxes and insurance when the rental income is needed to qualify for the VA home loan.

Documentation of applicants prior landlord or Property Maintenance experience if rental income is not required to qualify, the landlord experience requirements is not needed.

The amount of rental income used on existing units is based on 75% of the prior verified rent, unless a higher percentage can be documented.

If the units are proposed property, the then ba would require a letter from the appraiser stating that fair rental value and vacancy operating cost reductions of that rental figure.

  • Alimony, child support, maintenance

Verify the income of the applicant wants to be considered. The payments must be likely to continue in order to include them in effective income.

Factors used to determine whether that payments will continue include, but are not limited to:

  • What did the payments are received pursuant to a written agreement or Court decree,
  • The length of time the payments
  • Received, the regulatory of receipt, and

Note: Lenders must be in compliance with the Equal Credit Opportunity Act the ecoa. Also, there must be three years of continuance from the date of the note.

  • Other income sources
  • Temporary income includes overtime, part-time, second jobs, and bonuses
  • Note: generally such an income cannot be considered a stable and reliable unless it has continued and is verified for 2 years.
  • Commission income may be considered after one year as long as the bar has Pryor related experience or extensive specialized
  • Other types of income which may be considered as effective income include, but are not limited to:
  • Pension or other retirement benefits,
  • Disability income,
  • Dividends from stocks,
  • Interest from bonds, savings account, and so on, and royalties.
  • Income of recently discharged Veterans
  • Obtain verification of any of the following which apply:
  • Retirement income, and
  • Military separation pay payments.

Tip: cases involving recently discharged veterans often require the underwriter to exercise a great deal of flexibility and judgment in determining whether the employment income will continue in the foreseeable future this is because some veterans may have little or no employment experience other than their military occupation. Continuity of employment is essential for veteran with no retirement income or insufficient retirement income to support the loan obligation.

  • Assets and Reserves

The VA has no requirements on reserves with what is considered as decent credit and loan amounts $417,000. lenders may have overlays so check with your lender.

When will the VA require cash or Reserves?

  • Jumbo loan reserves are determined by that a us and the approval will specify what reserves if any are required.
  • Cash may be required if there is a difference between the sales price and the loan amount. That is the case when the sales price exceeds the reasonable value appraised established by the VA.

Note: the VA does not require additional cash to cover a certain number of mortgage payments reserves. Liquid assets or cash only need to be verified to the extent that they need a closed loan. Retirement funds not available to the veteran can not be included in liquid assets

  • Gift funds

There is no specific requirement in the VA lenders handbook to verify gift funds in the donors or applicants account.

The only requirement is for the lender to obtain a gift letter. Many lenders required documentation of the veterans receipt of the funds from the donor

This ensures that the veteran did not obtain the financing to cover the closing cost generally gift funds from an immediate family member is acceptable

Note calling the lender May gross up non-taxable income by 115%, or on a case-by-case basis up to the tax bracket of the bar. This calculation will help at times meet the residual income guidelines.

  • VA residual income requirements
  • When calling when qualifying for FHA or conventional loan, debt to income ratio is one of the primary factors. While VA also has published maximum debt-to-income ratio, it has another layer of analysis: residual income calculation 41%.
  • Basically residual income is how much money you have left over each month after all your major expenses are paid.
  • Those leftovers cover things like gas, food clothing and other types of family needs. The VA wants to know that the Veteran has enough residual income to keep their household afloat.

Note: a mortgage payment can put a significant strain on family finances. So prospective VA home buyers must have a minimum amount of residual income depending on where they live and how many people live in the home. see sample chart next slide.

  • VA Residual Income Reqirements - Chart

Residual Income Requirements

For loan amounts of $79,999and Above

Family SizeNorth EastMidwestSouthWest
1$390$382$382$425
2$654$641S$641$713
3$788$772$772$859
4$888$868$772$859
5$921$902$902$1,004
Over 5Add $80 for each additional member up to a family of seven.

Residual Income Requirements

For loan amounts of $80,999 and Above

Family SizeNorth EastMidwestSouthWest
1$450$441$441$425
2$755$441S$641$713
3$909$889$889$990
4$1,025$1,003$1,003$1,117
5$1062$1,039$1,039$1,158
Over 5Add $80 for each additional member up to a family of seven.

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Highly likely to recommend

Skip had experienced knowledge of lot sales and new home builds. Always kept me informed and was quick to respond to any inquires or concerns. Excellent rapport.

When I was first introduced to skip young I was selling a house that most people were not even going to look at let alone buy..Skip assured me that he would find a buyer and he went outside of the realm to get it done.Then he quickly found a Nother house I was highly interested in and helped with that purchase as well. I have now live in that house for the last 13 years. So you say to yourself well would you call Skip again the answer is absolutely.More Less

I tried unsuccessfully for four years to sell my home in Mechanicsville. Two different real estate companies declined to renew my listing. Thank goodness for Skip Young. He never gave up and never made any excuses - and this was at a time when the real estate market was at it’s absolute worst. We had some offers that fell through at the last minute. Skip never wavered. His attitude was always positive. Thanks to Skip’s tenacity and professionalism my house sold and I got the fresh start I needed. Thank you Skip.More Less

I bought my first home in 2008. Skip was so helpful and patient with me. He helped me along in the whole process and fully explained everything so I felt comfortable. He found me so many houses to see. I would definitely recommend him!

I am thinking about buying or building another home and the first person I thought of was Skip Young. He was my real estate agent for my first home I purchased in 2004. Wow he made that experience a memorable one. Awesome person and most of all the best real estate agent I had ever came across.

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If you are stationed here and are looking to purchase or sell a home please contact Skip Young Realtor®:

"Marine Barracks DC" "National Guard Armory" "American Military Society" "Navy Lodge" "American Military Society" "US Naval Reserve Readiness Military Naval Air Attach" "Washington DC Police Department" "Air Supply US Coast Guard Headquarters" "Joint Anacostia Bolling AFB" "Department of Navy" "Fort George G. Meade" "Naval Support Facility Indian Head" "Joint Base Andrews" "Coast Guard Yard" "US Air Force Civil Air Patrol" "NAVAIR Maryland Military" "US Army Reserve Center" "Department Naval Surface Warfare Center" "Army National Guard Recruiter" "Naval Air Station Patuxent River" "Welcome to the Fort Belvoir" "Air Force United States Department Joint Base Andrews, MD"

Skip Young Realtor® with Reviews as a Realtor®, has an extensive background in working with an Elite Unit while serving his country from 91 - 94. Now an Award-winning Realtor®, located in Waldorf MD, has proven not just in the ranks of the field with an Elite unit in the Army, but also in the Maryland Real Estate Business. By working with every type of client, to include active duty and veterans alike. His dedication to helping those who are serving and need to use their VA loan, need information on leasing a property due to a short-term duty station at any one of the bases here in Washington DC, Maryland or Virginia. Military bases such as:

  • Hire Skip Young Relator® for your next Home Purchase or Sale

Waldorf Maryland Realtor® - Skip Young Realtor®

If you are stationed here and are looking to purchase or sell a home please contact Skip You are serving and need to use their VA loan, need information on leasing a property due to a short-term duty station at any one of the bases here in Washington DC, Maryland or Virginia. Military bases such as:

Skip Young Realtor® with Reviews as a Realtor®, has an extensive background in working with an Elite Unit while serving his country from 91 - 94. Now an Award-winning Realtor®, located in Waldorf MD, has proven not just in the ranks of the field with an Elite unit in the Army, but also in the Maryland Real Estate Business. By working with every type of client, to include active duty and veterans alike. His dedication to helping those who are serving and need to use their VA loan, need information on leasing a property due to a short-term duty station at any one of the bases here in the Washington DC, Maryland or Virginia. Military bases such as:

There are currently 23 million veterans and service members right in your local community of Washington DC, Maryland, and Virginia. They transact over $153 billion annually in the Local Real Estate purchases and Selling of Property, along with the Rental Market. Learn how you can help tap into and serve the veteran community with VAREP, the Greater Annapolis Chapter. Skip Young your Waldorf MD Realtor® and Veteran is still continuing to serve my country by helping our community of brothers and sisters by representing the Government Affairs division. The position is about assisting in changing the laws that help protect veterans and service members who need to find housing in the Washington DC Maryland and Virginia area.

Skip Young EXP Realty Waldorf MD Realtor® Realtor®, Veteran, New Home Sales eXp Realty

  • eXpRealty
  • 137 National Plaza, Suite 300
  • National Harbor, MD 20745