USDA - Income Verification of Non-Borrowing Adult

[Anonymous]

I am wanting to apply for a USDA mortgage.  I will be the sole applicant.  My fiance's income is required on the application.  His income last year(2011)  was 1/2 of what it will be this year.  If the trend of his income continues this year, our household income will exceed the limit for a USDA loan.  However, recently a lot of his income has come from overtime pay.  If he did not receive any income from overtime, we would qualify.  (I mean current rate of pay for 40 hrs/week)  If they take the average of this year's and last year's income we would qualify.  Also, he works for a temp/staffing agency.  Is that considered dependable income?  USDA says income must be verifyable and dependable.    Does anyone know how the income of a non -borrowing adult is calculated/verified?  BTW, my personal occupation/income is stable.     

[Anonymous]

You may have to look up the maximum income requirements for USDA for household of Two people.  My son lives with me and is Autistic, at this point brings no income, I had to write LOE stating everything to that aspect. I did it that way because I used him on my tax returns for deductions and I wanted to cover everything.  Talk with mortgage broker and see if there are extenuating circumstances that could exclude fiance because you aren't married as of yet.

[Anonymous]

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@Anonymous wrote:

You may have to look up the maximum income requirements for USDA for household of Two people.  My son lives with me and is Autistic, at this point brings no income, I had to write LOE stating everything to that aspect. I did it that way because I used him on my tax returns for deductions and I wanted to cover everything.  Talk with mortgage broker and see if there are extenuating circumstances that could exclude fiance because you aren't married as of yet.

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I know the income is open to explanation. I had two issues with income on my USDA loan. 

1.) I am still technically married, even though we have been seperated for 3 years and we file joint tax returns. Her income plus mine = well over the limit. 

- We just had to submit a LOE and proof of residence for her (utility bill at her address) 

2.) I accepted a promotion at work on 4/1/12 that caused me to go from hourly + ot to salary. It works out with my OT I would have been over the limit, but without it I was fine.

- My boss had to submit a LOE explaining my position and pay and that OT was no longer part of my pay. He also stated that bonus income is not guarenteed and based on performance. That was good enough to get that income excluded as well.  

My file went right through underwriting with both the USDA and the lender with no further problems. I closed eariler this month.

[Anonymous]

Thank you for your input. I'm really wanting to get qualified for a USDA loan. I could probably get a FHA loan, but honestly the "no down payment, 100% financing" sounds great. I don't know how other "moderate income" families save up for a down payment on a conventional loan. I'm going to talk to a lender this week. I just wanted to get all of my ducks in a row before. Btw, congrats on your new home!

[Booner72]

It doesn't matter if you are married or not - my friend closed on a USDA living with her boyfriend and his income counted.  I'd bet they will count his income, regardless that it's a temp agency.

I can't guess how USDA will figure income, but for my FHA they took the last 2 months of my paystubs and figured it from that.  (Not last year's taxes, what I was making now).

Hope this info helps.  GOOD LUCK!

[ceejx]

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@Anonymous wrote:

1.) I am still technically married, even though we have been seperated for 3 years 

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I know this aint the theme of the post, but just wondering, I'm in the same situation, what state are you in and did you encounter any problems specific to this? 

[Anonymous]

@ seigex

I am in Ohio and ourside of the letter of explination and the utility bill from my wife, I never got any questions from my lender or USDA.

[Anonymous]

@ Booner and Razorback

IME, USDA is good about allowing you to explain the income. If you used my average income over the last 3 years, I would not have quialified, reguardless of my martial status, my income solo would have been too much.

When I made my application to my lender I explained that I was no longer elligible for OT (which was a large portion of my income) and that my bonues (which I had gotten pretty regularly for the past 3 years) where subject to performance and where no way guarenteed.

Outside of having my boss write a letter explaining exactly that I never got another question about my income from my lender or USDA.

The wait time at USDA and the stupid pest inspection was what caused ALL of my angst with my home purchase.

I hope this helps. I live in OH and had an awesome LO and Lender, if you want to PM me I will give you the contact info.

[ceejx]

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@Anonymous wrote:

@ seigex

I am in Ohio and ourside of the letter of explination and the utility bill from my wife, I never got any questions from my lender or USDA.

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Thanks for the info, benefits to not living in a community property state