VA Loan Requirements With Business Expense Deductions

A common surprise item that can derail a VA loan approval as a total surprise to the VA borrower are form 2106 unreimbursed business expenses deducted on a tax return.   A VA borrower can think they have the income to qualify for a VA loan, and then once the VA borrower’s tax returns are reviewed and unreimbursed business expenses are deducted from the VA borrower’s income to qualify, they no longer qualify.

So if you want to get a VA loan this year to buy a house in California, you may want to be aware when you prepare your 2010 tax returns that 2106 unreimbursed expenses with be deducted from your income to qualify for a VA loan.   So if you make $60,000 a year, but you have $20,000 in unreimbursed expenses, VA loan requirements will only count $40,000 in income to qualify.  This VA loan requirement can really totally surprise VA borrowers who thought they were good to go to qualify for a VA loan.

What the VA lender will do is generally take your unreimbursed expenses from the last two years tax returns, average that amount and then subtract it from your income.  So once again, just keep this in mind when you apply for a VA loan.

Below are some of the most up-to-date top benefits of VA lending in California:

• VA loan guidelines allow veterans receiving VA disability pay to have the VA funding fee waived.  This creates a 100% financing loan without any mortgage insurance and this is best loan available anywhere hands-down.
• VA loans are still 100% financing, you do not need a down payment
• VA loan limits in California go up to $1,000,000 with 100% financing in San Francisco, Alameda, San Mateo and other Bay Area counties.  VA loan limits in Los Angeles and Orange County are $700,000 with zero down.  San Diego County VA loan limit is $537,500.  You can go over these VA loan limits with a small down payment.
• VA loan credit does not have to be perfect.  Call us if you score is below 620 and we can assist your with raising it.

So don’t hesitate to give us a call at 858-922-7899 or email at homeloan8@gmail.com if you would like to get approved for a VA loan in California.

Regards,

Rob Chomentowski

858-922-7899

Sr. Loan Officer (and VA specialist)

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