USDA Loan - Business Loss reported on prior Tax Return. Help!

It seems that the mortgage underwriter wants to subtract the $6k loss from my tax return income (before sending loan to USDA I suppose) which reduces my AGI on 2015 taxes. I'm just making sure that this will not actually happen. I should hear back sometime today hopefully. I did call a local USDA rep this morning and my understanding of this is correct. The business loss should not count against my income. I'm still nervous at this point and wondering if someone have knowledge or experience with this.

I'm not saying you are buying too much house but if your income were to drop $6k and you not be able to afford the house, you might be buying too much house.

If the business closed in 2015, and you can show that it actually did, with documentation such as closing bank account, any documents filed with the state showing the company is shut down, etc, provide that to the underwriter. Basically you are wanting to show that the 6K loss will not happen in the future.

If you can give assurance that this is not a recurring thing, a good underwriter should be able to work through this.

The UW isn't thinking with his RD cap on. He's thinking with his regular products in mind and trying to UW based on that. Your broker needs to communicate back to him by showing him the policy that guides the income.

I don't see the AGI reduction as any issue whatsoever, especially considering the section you're referencing. You can confirm via paperwork that the business dissolved and is no longer capable of reducing your income as a result.

You can also confirm via paycheck stubs, written & verbal VOE that you're at your current POE making your current rate of pay. This should be way more than enough to overcome any stip regarding income requirements for RD.

It's good to be concerned, but don't worry too much about this. You should be good to go, bro.

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Golfer

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Nah. We'd be fine...

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$100-120 starter home in the LP/AP/Tangi area would definitely throw a DTI out of whack if it was reduced by $500/month for someone starting out or whose in a lower income bracket than you are.

He's got a point. Go easy on him...after all, the MT isn't just for OT Ballers

Yeah I'm just starting out. 24 years old, 2 years out of college, and so close to purchasing first home. I have to gather all my proof and the UW will send to management for approval. Please wish me luck!

You come here, asking for advice, then act like a douche when level-headed posters take the time to help.

Good luck. You'll need it.

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iknowmorethanyou

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You come here, asking for advice, then act like a douche when level-headed posters take the time to help.

Good luck. You'll need it.

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Hmmm.

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iknowmorethanyou

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act like a douche

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Hmmm.

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iknowmorethanyou

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a douche

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Hmmm indeed.

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hawkeye007

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tell me again why you got out of the business your knowledge level is damn impressive.

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First off, thanks for the compliment. It means a lot coming from you.

I could give you a lot of reasons, but what it boils down to is that I went from a really structured environment where I was almost totally commissioned to a really unstructured environment where I was almost totally commissioned.

I started at a company and ended up working at a smaller company and then for friends. The former I flourished and probably could've retired very happily. The latter two were just the wrong environment for me at the wrong time. I was in my early-mid-20's and didn't have a lot of focus away from work or at work on the 1st after I killed it on the 31st. The corporate environment I had more management and structure and it's definitely what I needed looking back.

It became a cycle and I didn't seem mature enough to pull out of it: grind your @ss off after getting annoyed with yourself and your spending habits and then coast and get impulsive with your checking account after I did well.

I had some financial goals that didn't involve such inconsistent-if not awesome-paydays. It was a tough, tough decision. But sometimes you have to look yourself in the mirror and recognize your strength is honestly a weakness.

Never lost the itch though. Not for a second. I'm hoping the Notary stuff can scratch a bit of it with me pushing for business, marketing myself and putting together a side hustle from where I'm at now. I feel like I'm a little more stable now and the hindsight can prove beneficial now.