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USDA Income Eligibility - Quick Question

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Tweak3D
Member

USDA Income Eligibility - Quick Question

So I work for a tax firm and have over time every year during tax season. I've been with the same firm for going on my thrid year now. For my first 2 years I received roughly $1500 and $3400 in overtime. This year, I will be around $4000. Because of my income level, this will place me very very close to the USDA limit in my region (within several hundred dollars if they only use my most recent overtime from this year). My overtime is only so high this year as we had some individuals from our team leave so late December and January I had to work some extra time. This is not regular for my position and I would expect on an average year for me to get closer to $2800-3000 in ovetime due to our typical tax season.

 

This is for the USDA guarnteed, when they calculate projected income, will they use average overtime or current yearly overtime? I'd imagine current, but that seems a bit silly since it is not guarnteed at all. I have a feeling they will be averaging with atleast last year and possibly the year before to get a better picture of whats going on. Should I be worried being so close to the limit? My tax season isn't quite over yet, so I am cutting back on all but the required overtime to keep the buffer as large as possible. I fear since they typically use a projected worst case approach that they may have some issues with me being so close.

 

My loan officer and Underwriter don't think it will be an issue, but they said the USDA is odd with these things sometimes. Anythoughts? We are set to close in mid-late april, so I really am anxious to know about the USDA's decesion and am just looking for som guidance.

 

Thanks!

Message 1 of 4
3 REPLIES 3
bbb3601
Frequent Contributor

Re: USDA Income Eligibility - Quick Question

My guess would be averaged. If you call your local office I bet they would tell you. I would also bet their website has it in plain english.

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Message 2 of 4
Scope27
Regular Contributor

Re: USDA Income Eligibility - Quick Question

From when I app'd with my loan company I had the same issue.  My regular income was 31k and I get around 10-15k in overtime yearly.  My LO explained to me that he will use my base income being that OT cannot be assumed as a constant income.  It can be proven through pay stubs that they were OT.  Hope that helps

Message 3 of 4
Tweak3D
Member

Re: USDA Income Eligibility - Quick Question

The issue with mine is that they are using it because I've received overtime for the past 3 years, but it has obviously fluctuated quite a bit. 

 

My main concern is how they calculate being considered eligible. I've just finished most of my overtime for the year, which pretty much reflects how I've received overtime in the past, but, because I was promoted last year if I calculate my base income and add the overtime and bonus (yearly) i've received for face value, I am literally a few $300 or so from the limit for my area.

 

If I average the Bonus for the past 2 years and the overtime for the past 2, I am under by about $600. It all depends on how they calculate my eiligibility. Since the year is still so early, its hard for them to use anything except a past average (I would assume) to get a good idea of what this year will be like, but because my margins are so thin, it doesn't take much to push me over the limit. So far, we've overcome so much to get to this point and I am just so afraid the USDA is going to deny this for some stupid of petty reason. I am my Lender have talked with them and gotten different answers from each person we've talked to.

 

I really wish they were just clear on their site as it would make this much less stressful.

Message 4 of 4
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