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gross up non taxable VA COMP or SSDI

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Anonymous
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gross up non taxable VA COMP or SSDI

Just called NFCU to ask some questions.  Basically interviewing brokers.

 

NFCU agent messaged an underwriter.  The underwriter messaged back saying they don't usually gross up income.  Don't know if the agent included that it was non taxable income or what he exactly asked.

 

I called a Wells Fargo broker, and she was very pleasant.  She confirmed they gross up according to section 403 under incomes for VA Compensation and SSDI under the VA lender guidelines which I also found by googling..  I asked her if they gross up 25% and she confirmed yes.

 

Just wondering because without my gross up I would be exactly 41% DTI including PITI and HOA fees for the house we want.  I would have 0% DTI before the home because I will pay off all debts from sale of my current VA loan home and sit in rental for 6 months before applying.

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Anonymous
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Re: NFCU doesn't gross up non taxable VA COMP or SSDI

Seems the first representative was misinformed.  I also found out this, discrimination in lending:

 

https://www.fdic.gov/regulations/laws/rules/5000-3860.html

 

"Example:  In the past, lenders primarily considered net income in making underwriting decisions. In recent years, the trend has been to consider gross income. A lender decided to switch its practices to consider gross income rather than net income. However, in calculating gross income, the lender did not distinguish between taxable and nontaxable income even though nontaxable income is of more value than the equivalent amount of taxable income. The lender's policy may have a disparate impact on individuals with disabilities and the elderly, both of whom are more likely than the general applicant pool to receive substantial nontaxable income. The lender's policy is likely to be proven discriminatory. First, the lender is unlikely to be able to show that the policy is compelled by business necessity. Second, even if the lender could show business necessity, the lender could achieve the same purpose with less discriminatory effect by "grossing up" nontaxable income (i.e., making it equivalent to gross taxable income by using formulas related to the applicant's tax bracket)."


The rep I called today confirmed non taxable income such as VA Comp and SSDI are grossed up 25%.

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