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usda loan

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Anonymous
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usda loan

I have a question about usda loan- my husband is in construction he works and gets a w2 and also cash. we opened an llc for his self employment income and will pay taxes on it the first time this year. we were hoping to start looking at houses in 2015 but 3 banks i spoke to all said they will not count his self employment income and only his w2 work since its only 1 year on tax returns. with just a w2 income we cannot prove we can pay the mortgage back the income is to low.

Does anyone know if this is the truth? the banks i called dont seem very informed abut usda and wanna push to convential right away. i do not want to put 5% down if its not necessary.

I dont see why the money is not acceptable to use since it shows our income going up not declining and its also the same exact line of work.

Thanks to anyone that may have the answer!

Message 1 of 4
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ShanetheMortgageMan
Super Contributor

Re: usda loan

Yup, that is a standard guideline to need 2 years of tax returns showing self-employment income in order to use it.  A 2 year average of the income is used.  Same guideline for USDA & conventional.

 

The reason being is that when you are self-employed you have expenses that an employee usually doesn't have, and about 1/3rd of of self-employed ventures don't make it through their second year... not saying that yours will, but as you can see self-employed is riskier and lenders base lending money on risk.

 

Will you be reporting it on a Schedule C or did you start an S-corporation?

Free Mortgage Advice & Pre-Approvals (FHA, VA, USDA, Fannie, Freddie, Non-Prime, Construction, Renovation/Rehab, Commercial) since 2002
Located in Southern California and lending in all 50 states
Message 2 of 4
Anonymous
Not applicable

Re: usda loan

im going to pm you!

Message 3 of 4
ShanetheMortgageMan
Super Contributor

Re: usda loan

Sounds good, didn't get a PM though.

Free Mortgage Advice & Pre-Approvals (FHA, VA, USDA, Fannie, Freddie, Non-Prime, Construction, Renovation/Rehab, Commercial) since 2002
Located in Southern California and lending in all 50 states
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