Getting a VA Loan as a Self-Employed or Commissioned Veteran

When a veteran is self-employed or commissioned the income documentation required to qualify for a VA home loan can be much more involved than a salaried veteran. If you are paid a salary, the income documentation is very straightforward, you will just need to provide your last 30 days paystubs and your last 2 years w-2′s. But if you are self-employed or paid mostly on commission, you will need to provide your last 2 years federal tax returns all pages (and also corporate returns if your business is a corporation). And then to calculate your income for qualification for the VA Loan we will average your last 2 years NET income.

Keep in mind that it is your NET business income, not your GROSS income that will be the income used for qualifying for VA financing. There are some deductions that can be added back to your income, most notably depreciation. And on a case-by-case basis, depending on the underwriter, you may be able to add back in:

business use of home
a % of your per mile vehicle deduction
one time loss carry-over’s from previous years

But other than depreciation, I wouldn’t plan on adding back in the above, but there is a good chance you can.

Also look out for unreimbursed employee business expenses. Even if you are a w-2 employee and paid a salary, if you claim unreimbursed business expenses on form 2106 on your federal tax returns, those deductions will be deducted from your qualifying income. There are some items that can be added back in to income, but this can be on a case-by-case basis and up to the underwriter. And if you are paid commission, the commission part of your income will have to averaged over the last two years.

So it’s important your plan in advance with your CPA or tax planner and a VA loan officer if you are considering getting a VA Loan. You need to be able to know based on your latest two years of tax returns, what income the VA Loan underwriter will be using to qualify you to purchase.

If you have any questions or if I can assist approving you for a VA Loan, please email me at homeloan8@gmail.com or call 858-922-7899.

Warm Regards,

Rob Chomentowski

Sr. Loan Officer (and VA Loan specialist)

homeloan8@gmail.com

858-922-7899