USDA Home Loan Adjusted Annual Income

USDA No Money Down Loans are one of the most requested programs of ANY loan program we do.  We recently had two different families buying a home in North Carolina who had been told that they didn’t qualify for the program – who actually did.  The problem for them was that the Loan Officer they originally talked to was not aware of the Adjustments you can make to Household Annual Income.

In one case, a grandmother lived in the home.  She was not going to be on the mortgage loan, but the loan officer counted her income – taking the family over the maximum income limit for the County.  The Grandmother was disabled – and as you can see below, her income did not have to be counted, so the family is buying a new home, and moving at the end of the week!

The second family that contacted us live near a college, and in August, an 18 year old nephew is moving with them while he attends college.  We have all of the documentation regarding his attendance to the school, and all correspondence lists his Aunt’s home address as his address – that works!  The difference between having 4 family members in the household and having 5 meant that this family is NOT over the income limit and they can buy a home!

If you have questions about the USDA Home Loan Income Calculations, or you want to know more about No Money Down Loans, please call Steve and Eleanor Thorne 919 649 5058.  We do tons of these loans every month, and we know the guidelines!

USDA Loan Guidelines – Adjusted annual income

1980.348  Adjusted annual income

Adjusted annual income is annual income as determined in §1980.347 of this subpart less the following:

(a)  A deduction of $480 for each member of the family residing in the household, other than the applicant, spouse, or co-applicant, who is:

(1)  Under 18 years of age;

(2)  Eighteen years of age or older and is disabled as defined in §1980.302(a) of this subpart; or

(3)  A full-time student aged 18 or older.

(b)  A deduction of $400 for any elderly family as defined in §1980.302(a) of this subpart.

(c)  A deduction for the care of minors 12 years of age or under, to the extent necessary to enable a member of the applicant/borrower’s family to be gainfully employed or to further his or her education.  The deduction will be based only on monies reasonably anticipated to be paid for care services and, if caused by employment, must not exceed the amount of income received from such employment.  Payments for these services may not be made to persons whom the applicant/borrower is entitled to claim as dependents for income tax purposes.  Full justification for such deduction must be recorded in detail in the loan docket.

(d)  A deduction of the amount by which the aggregate of the following expenses of the household exceeds 3 percent of gross annual income:

(1)  Medical expenses for any elderly family (as defined in §1980.302(a) of this subpart).  This includes medical expenses for any household member the applicant/borrower anticipates incurring over the ensuing 12 months and which are not covered by insurance (e.g., dental expenses, prescription medicines, medical insurance premiums, eyeglasses, hearing aids and batteries, home nursing care, monthly payments on accumulated major medical bills, and full-time nursing or institutional care which cannot be provided in the home for a member of the household); and

(2)  Reasonable attendant care and auxiliary apparatus expenses for each disabled member of any household to the extent necessary to enable any member of such household (including such disabled member) to be employed.

More Information on USDA Loans, and USDA Frequently Asked Questions