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Super Contributor
ShanetheMortgageMan
Posts: 7,865
Registered: ‎09-28-2007

Re: Can one spouse apply for USDA without the other??

Paystubs showing he's been paid for at least 30 days is a typical requirement.  However the more time he has as a W-2'd employee before he applies the better.

Regular Contributor
goodygoody
Posts: 199
Registered: ‎04-07-2009

Re: Can one spouse apply for USDA without the other??

I'm sorry to keep beating a dead horse...lol...but I just want to clarify - even if my husband has been consistently employed for the last 5 years, they won't use his prior year income and just average it with his self-employment income?  

 

Also for clarification, if my husband is self-employed right now, but wants to apply for a mortgage in, say, May - can he wait until April, ask his contractor to make him a regular W-2 employee for a month, get a month of paystubs and then apply for a mortgage successfully?  Or will the fact that he's self-employed from now till April throw a monkey wrench into that idea?  

 

It's so frustrating, because he's working full-time just like always - it's just the tax status that changed.  The idea of waiting another 2 years to buy makes me really crazy...  

Regular Contributor
goodygoody
Posts: 199
Registered: ‎04-07-2009

Re: Can one spouse apply for USDA without the other??

Ok, wait, I just had a potentially insane idea, and would love feedback on it.  

 

What if we incorporate as an LLC or corporation, but under my name, and I pay my husband as my "employee?"  Would that work?  We have been considering incorporation anyway, but now I'm wondering if this could be a way around all of the problems with getting a house...  Is this insane?

Super Contributor
ShanetheMortgageMan
Posts: 7,865
Registered: ‎09-28-2007

Re: Can one spouse apply for USDA without the other??


goodygoody wrote:

I'm sorry to keep beating a dead horse...lol...but I just want to clarify - even if my husband has been consistently employed for the last 5 years, they won't use his prior year income and just average it with his self-employment income?  


Correct, they will not even consider his income prior to being self-employed.


Also for clarification, if my husband is self-employed right now, but wants to apply for a mortgage in, say, May - can he wait until April, ask his contractor to make him a regular W-2 employee for a month, get a month of paystubs and then apply for a mortgage successfully?  Or will the fact that he's self-employed from now till April throw a monkey wrench into that idea? 


He should be OK being W-2'd for a month before he applies, but the longer he is W-2'd before he applies the better it looks to an underwriter.

Super Contributor
ShanetheMortgageMan
Posts: 7,865
Registered: ‎09-28-2007

Re: Can one spouse apply for USDA without the other??


goodygoody wrote:

Ok, wait, I just had a potentially insane idea, and would love feedback on it.  

 

What if we incorporate as an LLC or corporation, but under my name, and I pay my husband as my "employee?"  Would that work?  We have been considering incorporation anyway, but now I'm wondering if this could be a way around all of the problems with getting a house...  Is this insane?


Working for family needs 2 years as well.   As you can see, 2 years is the magic number :smileyhappy:

Frequent Contributor
Peter1142
Posts: 346
Registered: ‎08-17-2013

Re: Can one spouse apply for USDA without the other??

Is that really true? I thought the only requirement working for family is to prove you don't have ownership of the company, and you are treated no different than any other W2 employee
Super Contributor
ShanetheMortgageMan
Posts: 7,865
Registered: ‎09-28-2007

Re: Can one spouse apply for USDA without the other??


Peter1142 wrote:
Is that really true? I thought the only requirement working for family is to prove you don't have ownership of the company, and you are treated no different than any other W2 employee

If the company has been established for at least 2 years, and you are transferring from a similar position to one at the employer, then less than 2 years can work out.  But at a brand new company started by a spouse who has no history of owning & operating prior successful companies in the past, 2 years is going to be the norm.  We just did a loan for someone who started working for their spouse's company (which was around for 8+ years) a couple months before applying, and we had to make an excellent case for the employment & income to be found acceptable.  Prior years tax returns to show the company is profitable, P&L for the current year, an explanation on how they could be able to afford to pay the spouse without hindering the business, and a few other items.  Several lenders said no, but finally found one that said yes.  But with a brand new company, pretty doubtful it'll work out before 2 years of employment.

Regular Contributor
goodygoody
Posts: 199
Registered: ‎04-07-2009

Re: Can one spouse apply for USDA without the other??

Ah, darnit!  Thought I found a loophole!  :smileyvery-happy:

 

Looks like it's trying the W-2 route or waiting 2 years...  Thanks for the help anyway Shane!!

Super Contributor
ShanetheMortgageMan
Posts: 7,865
Registered: ‎09-28-2007

Re: Can one spouse apply for USDA without the other??


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