Can you use Foster Income for a Kentucky Mortgage Loan Approval?

 Foster Income for a Kentucky Mortgage 

Yes, if it can be documented that foster care income has been received for the last 2 years that income is likely to continue for at least 3 years from the date of the Note, then it can be used to qualify. 

 If it can be verified that income is not taxable, it can be grossed up per 4000.1 II.A.4.c.xii.(P) or II.A.5.b.xii.(P) by either borrower's actual tax rate or 115% whichever is lower.

Yes, we need to show 24 months receipt of this income, possible exception if only received for 12 months, and we would need something from the agency showing this will continue for 3 years.

Foster-Care Income for a Mortgage Loan Approval

What are the guidelines?

Income received from a state- or county-sponsored organization for providing temporary care for one or more children may be considered acceptable stable income if the following requirements are met.

✓	Verification of Foster-Care Income
	Verify the foster-care income with letters of verification from the organizations providing the income.
	Document that the borrower has a two-year history of providing foster-care services. If the borrower has not been receiving this type of income for two full years, the income may still be counted as stable income if the borrower has at least a 12-month history of providing foster-care services, and the income does not represent more than 30% of the total gross income that is used to qualify for the mortgage loan.

Joel Lobb (NMLS#57916)
Senior  Loan Officer

Text/call 502-905-3708

kentuckyloan@gmail.com

If you are an individual with disabilities who needs accommodation, or you are having difficulty using our website to apply for a loan, please contact us at 502-905-3708.

Disclaimer: No statement on this site is a commitment to make a loan. Loans are subject to borrower qualifications, including income, property evaluation, sufficient equity in the home to meet Loan-to-Value requirements, and final credit approval. Approvals are subject to underwriting guidelines, interest rates, and program guidelines and are subject to change without notice based on applicant's eligibility and market conditions. Refinancing an existing loan may result in total finance charges being higher over the life of a loan. Reduction in payments may reflect a longer loan term. Terms of any loan may be subject to payment of points and fees by the applicant  Equal Opportunity Lender. NMLS#57916http://www.nmlsconsumeraccess.org/

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Can you use Non-taxable income like Child Support, Social Security, Workers Compensation to qualify for a Kentucky Mortgage Loan?

You can use child support, social security, and workers compensation as long as it will continue for the next 3 years.

On a note for Child support, you have to show you have been getting the last 12 months consistently to use that income.

Another favorable option in using non-taxable income, is that you can gross it up to 115% to 125% in most cases to show you have more qualifying income.

Fannie Mae, USDA, VA, Conventional loan programs will let you gross up the income by 125%.

For example, if you grossed $1000 a month, then on a VA, USDA  or Conventional  loan you could have a qualifying income of $1,250 to qualify for more of a house payment.

FHA will allow for 115% grossing up of non-taxable income. So on a $1,000 gross monthly income, the max income used to qualify monthly would be $1,150.00

Some lenders may create overlays to these agency guidelines, so keep that in mind.

It is best to use in most cases the lowest income to qualify in my opinion so just be on the safe side.


see chart below for FHA, VA, USDA, and Fannie Mae Conventional loan guidelines.

New Kentucky FHA Mortgage rules starting June 2015

New Kentucky FHA Mortgage rules starting June 2015

CAVIRS

Old Rule – Federal debt makes borrower ineligible

New Rule – VERIFIED federal debt makes the borrower ineligible

Part-Time Income

Old Rule – Underwriter discretion allowed when received less than 2 years

New Rule – Two years uninterrupted part-time income is required. Average income over prior 2 years or use 12-month average of hours at the current pay rate if the lender documents an increase in pay rate.

Rental Income on Retained Primary Residence
Old Rule – Rental income may be counted when relocating outside of reasonable commute distance for job and borrower has 25% equity.

New Rule – Rental income may be counted when relocating and the new residence is at least 100 miles from previous residence. If no history of rental income since the last tax filing, borrower must have 25% equity.

Non-taxable income

Old Rule – Gross up using tax rate evidenced on last tax return. If borrower did not file a return, use tax rate of 25%.

New Rule – Gross up using the greater of 15% or actual tax rate. If borrower did not file a tax return, use tax rate of 15%

Installment Debts Less Than 10 Months

Old Rule – May be excluded from ratios. If manual underwrite—may be excluded if debt will not affect ability to pay the mortgage.

New Rule – May be excluded ONLY if—they have cumulative payment of less than or equal to 5% of the borrower’s gross monthly income AND the borrower may not pay the debts down to achieve this percentage.

Multiple FHA Loans

Old Rule – If relocating for employment, borrower may obtain a second FHA loan for a new principal residence if current residence is more than a reasonable commute to new residence.

New Rule – If relocating for employment, the commuting distance between the old residence and new residence must be more than 100 miles.

source

http://www.mortgagetalkingpoints.com/2015/04/7-major-fha-rule-changes-eff-june-15-2015/

Senior  Loan Officer

(NMLS#57916)

American Mortgage Solutions, Inc.

800 Stone Creek Pkwy, Ste 7,

Louisville, KY 40223

 phone: (502) 905-3708

 Fax:     (502) 327-9119

kentuckyloan@gmail.com

 Company ID #1364 | MB73346

http://mylouisvillekentuckymortgage.com/

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Using a Pastor / Minister’s housing Clergy Income for A Mortgage Loan Approval

Using a Pastor / Minister’s housing allowance to qualify for a mortgage

Member of the Clergy Income for A Mortgage Loan Approval 

Where a borrower is a member of the clergy, all of the following will be required to document income: 1) Most recent year full tax return, 2) Most recent pay stubs, 3) W-2s, 4) Contract from the church to determine benefits.

The IRS looks at the housing allowance portion of a pastor’s income as an exclusion from income.  Therefore the housing allowance is not reported on the personal tax returns as taxable income.  Even though it is not reported on the tax returns, a pastor’s housing allowance can be used in qualifying for a mortgage loan to purchase or refinance a home. 

 As long as we can document the receipt of the housing income through a signed letter from the church/employer stating the actual breakdown of the pay and by providing copies of the checks received, we should be able to count the housing allowance as income.  Some employers will even put the housing allowance on the w2 as a nontaxable amount which makes it even easier. 

See guidelines below:

Housing or Parsonage Allowance A non-military housing or parsonage allowance may be considered qualifying income, if the income has been received for the most recent 12 months. The housing allowance may not be used to offset the monthly housing payment. All of the following income documentation is required:

 Written Verification of Employment, letter from employer, or paystubs reflecting the amount of the housing or parsonage allowance. 

 Terms under which the housing or parsonage allowance is paid.

 Proof of receipt of housing allowance for most recent 12 months. 

Housing or Parsonage allowance may be considered as qualifying income if there is documentation that the income has been received for the most recent 12 months and the allowance is likely to continue for the next three years.