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I had been planning on USDA for buying a home within the next few months. However, I just received a pay increase which puts me about $1000 over the yearly income limit. I was wondering about the income verification process, and if this definitely eliminates me from the program?
They will take a look at the last two years taxes AND the current paystubs or contact your employer -
If you are over you are over - they make you sign a document stating what you make
if you sign that and it is wrong it is fraud -
Sorry but it is probably time to shift gears to an FHA loan since it has the lowest down payment option after USDA
If you were looking at the Direct loan you may still qualify for the USDA guaranteed?
My statements above assumed you were looking at the Guaranteed limits
Brian
Thanks for the info Brian, and yes i was referring to guaranteed. I'm definitely not trying to cheat the system, just wondering if they consider what I actually made the year that I sign the contract or what I will be making. Since I received the increase half way through the year, I'm technically not above the limit for this year (will be next year however), but my stated salary does put me over. Looks like FHA for me, which is still a great deal at only 3.5%.
For eligibility purposes they are more concerned with "projected income". I had a situation once with a borrower who was scheduled to get a raise within 3 months of the loan closing, and it pushed them over the Direct limits, so they had to switch to the Guaranteed program. In a lot of situations if there is a non-working co-borrower they require them to sign an affidavit stating they aren't currently working or seeking work. Brian's advice was spot on about moving over to FHA.