Qualifying for FHA Loan In California When Self-Employed is a post from: FHA,VA and Conventional Home Loans in all 50 States
Since early 2008 when the lenders all eliminated all of the stated income loan programs, it has been a challenge for borrowers who are self-employed or independent contractors to obtain home financing, whether FHA, VA or conventional loans. Below are some FHA loan requirements to think about if you are self-employed, an independent contractor, or paid on commission only.
- FHA loan mortgage lenders will ask for your 2008 and 2009 federal tax returns and they will average the NET business income (not the GROSS) to calculate your income for qualification
- FHA lenders will add back depreciation to your income
- If your income has declined from your 2008 tax returns to your 2009 tax returns, FHA loan mortgage lenders will take only the 2008 income and not average
- If your income has gone up from 2008 to 2009, they will take the average
- If you are commission only, FHA loan approval requires a 2 yr history and will take the average
- If you will need your 2010 income to qualify, make sure you file your taxes as soon as possible in 2010. FHA loan guidelines require the lender to pull a transcript of that years returns and it can take the IRS 2-4 weeks to process your return
- If you are planning to qualify for a FHA loan, you may want to plan to show more income and take less write-offs
I hope this helps your understanding of qualifying for a FHA loan if you are self-employed or paid 1099. Don’t hesitate to email me at homeloan8@gmail.com or call at 858-922-7899 if you would like to get approved for a FHA loan in California.
Regards,
Rob Chomentowski
Sr. Loan Officer (FHA, VA, USDA, Homepath and conventional loan specialist)
858-922-7899
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