07-03-2014 07:45 PM
I've been working as a contracted rural mail carrier for the U.S. Postal service for the last 6 years. I get a regular paycheck, but at the end of the year, I get a 1099, so technically I'm self employed.
I sent in a pre-qualification form for a USDA Direct Loan, and was told that although my credit is good, my income is too low (and my DTI ratio is too high). The problem lies in my mileage deduction which takes over $10,000 off my Adjusted Gross Income.
Feeling really discouraged. Does anyone know if there's any way around this?
My accountant told me to keep track of my actual car expenses. He's offered to write a letter to the Loan Officer explaining that my actual car expenses are much lower than the mileage deduction. He's said he's done this before, and it has been accepted. However, he's not done it with the USDA. Does anyone know if this would be acceptable to them?
Most appreciative for any help or advice.
03-24-2015 04:29 AM
What I have found is that you can, indeed, "add back" income for mileage depreciation. Here is one article that discusses this: http://arizonasmortgagetalk.com/give-23-cents/
However, if you're looking for a USDA direct loan, they absolutely will not do it. I got a pre-approval for a USDA guaranteed loan from the mortgage company in that article (Prime Lending). My local bank was also willing to add back income for the mileage deduction. Unfortunately, the pre-approvals from both are still for very low amounts and I am having trouble finding a house in my area on that budget.
My financial situation has improved somewhat since I wrote that post, and I am now going through a local organization that helps first-time homebuyers. Through them, i am trying once again to get a USDA direct loan, but without the add-back. The direct loan is a much better option. Keeping my fingers crossed that I can get a higher pre-approval now that my situation has improved.
03-25-2015 02:48 PM
what I have found is that depreciation can be added back but only as straight line depreciation...there is no calculation for those that use standard rate mileage....which makes no sense. I have called the state office and didn't learn much either other than that they are not tax experts.....which I knew already.....extremely frustrated.
03-26-2015 11:15 PM
hello did you find a solution? we are in the same boat.
The poster has never been back online.
I spoke too soon!! The OP has returned.
03-27-2015 11:25 AM
Ug.... received a call from the state director who says it cannot be added back unless it is straight line depreciation.... so...... put in another call back to senior loan specialist in Washington D.C.
IMPORTANT INFORMATION: All FICO® Score products made available on myFICO.com include a FICO® Score 8, along with additional FICO® Score versions. Your lender or insurer may use a different FICO® Score than the versions you receive from myFICO, or another type of credit score altogether. Learn more
FICO, myFICO, Score Watch, The score lenders use, and The Score That Matters are trademarks or registered trademarks of Fair Isaac Corporation. Equifax Credit Report is a trademark of Equifax, Inc. and its affiliated companies. Many factors affect your FICO Score and the interest rates you may receive. Fair Isaac is not a credit repair organization as defined under federal or state law, including the Credit Repair Organizations Act. Fair Isaac does not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit record, credit history or credit rating. FTC's website on credit.