FHA overtime/per diem question

[Anonymous]

I have done a search and read everything I could fine relating to this but am still confused, so if some one could help explain it to me I would appreciate.

Here is my situation: I am a home health nurse making a salary. However, if I see more than the required number of patients per week I then get paid a per diem rate for each additional visit. I consistently make per diem money. Over the last 2 years if you average it out, it comes to about $10,000 year. My base salary now is $55K. I have applied for preapproval on a  FHA loan and when I got the paperwork that said I was approved, it showed my salary but no per diem income, it also did not reflect my car payment of $400/mo. I corrected the information and faxed it back to the lender and we are now in a holding pattern he said, until I get a property. I am afraid I am now going to get rejected after thinking I was approved because of my DTI without the per diem income. In a nut shell here is my info:

FICO 691, 735, 768.

monthly debts $640

Salary 55k

Per diem 10K

seeking FHA loan 130-145K

10years at employer

nothing greater than 30 days late and none in 2 years

20K in 401K

so the bottom line question here is will they use my per diem income to figure my DTI?

and does the above meet the FHA guidelines?

Message Edited by kimbur96 on 07-06-2008 03:49 AM

[DallasLoanGuy]

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kimbur96 wrote:

I have done a search and read everything I could fine relating to this but am still confused, so if some one could help explain it to me I would appreciate.

Here is my situation: I am a home health nurse making a salary. However, if I see more than the required number of patients per week I then get paid a per diem rate for each additional visit. I consistently make per diem money. Over the last 2 years if you average it out, it comes to about $10,000 year. My base salary now is $55K. I have applied for preapproval on a  FHA loan and when I got the paperwork that said I was approved, it showed my salary but no per diem income, it also did not reflect my car payment of $400/mo. I corrected the information and faxed it back to the lender and we are now in a holding pattern he said, until I get a property. I am afraid I am now going to get rejected after thinking I was approved because of my DTI without the per diem income. In a nut shell here is my info:

FICO 691, 735, 768.

monthly debts $640

Salary 55k

Per diem 10K

seeking FHA loan 130-145K

10years at employer

nothing greater than 30 days late and none in 2 years

20K in 401K

so the bottom line question here is will they use my per diem income to figure my DTI?

and does the above meet the FHA guidelines?

Message Edited by kimbur96 on 07-06-2008 03:49 AM

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they can average the bonus money over 2yrs and use it, yes.

however, if you qualify without it, i would leave it out of the file for simplicity

[EMB170guy]

I thought I would revisit this topic since a lot has changed in a year with respect to lending.

I work in the airline industry. I receive about $450/month of non-taxed per diem. This is an hourly payment made regardless of how much I actually spend on food/incidentals while at work. Its not a casual reimbursment from going to some trade show.. its a contractual, steady, reliable aand historically solid monthly flow of income.

My monthly gross pay on my pay stub includes this per diem. However because of the nontaxable treatment of this payment, the per diem does not show up on my W-2 or tax returns. Needless to say, calculating a debt-to-income ratio based on gross pay versus w-2 (divided monthly) yields much different results.

I am preparing to buy a home in a few month most likely using FHA. Is counting per diem, should i need to, going to be problematic with any/some/many/all lenders?

Thanks.

Message Edited by EMB170guy on 05-31-2009 08:48 AM

[MattH]

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@EMB170guy wrote:

I thought I would revisit this topic since a lot has changed in a year with respect to lending.

I work in the airline industry. I receive about $450/month of non-taxed per diem. This is an hourly payment made regardless of how much I actually spend on food/incidentals while at work. Its not a casual reimbursment from going to some trade show.. its a contractual, steady, reliable aand historically solid monthly flow of income.

My monthly gross pay on my pay stub includes this per diem. However because of the nontaxable treatment of this payment, the per diem does not show up on my W-2 or tax returns. Needless to say, calculating a debt-to-income ratio based on gross pay versus w-2 (divided monthly) yields much different results.

I am preparing to buy a home in a few month most likely using FHA. Is counting per diem, should i need to, going to be problematic with any/some/many/all lenders?

Thanks.

Message Edited by EMB170guy on 05-31-2009 08:48 AM

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The normal rule is, if it's not reported as taxable income then it does not figure into DTI calculations.  Hopefully one of the mortgage experts will chime in with specific details, but it would be rather surprising if this per diem were an exception to this rule.  Sometimes people have been known to file an amended tax return and pay additional taxes on the revised taxable income so they can qualify for a mortgage.

[DallasLoanGuy]

it is for expenses... underwriter will not include it as income.

i tried this when i was new in the biz. the client tried to argue that they NEVER spend nearly as much as they get. doesnt matter.

[Anonymous]

The general rule is that re-imbursement for expenses is not income becasue those "business" expenses come out of your salary.  So the only way to accurately figure that would be to deduct all expenses out of your paycheck and then add in the reimbursement.  Because this would be way too hard to verify and too easy to fake, they basicly say reimbursement is not income.  The best deal for qulaifying purposes is to seek to have the re-imbursement dropped and salary incresed to offset.  This is not the best situation in general though, just for DTI purposes.  

[EMB170guy]

thanks for the advice, makes sense. making it taxable income is most definitely off the table