A common surprise item that cause a FHA loan to be declined as a total surprise to the FHA loan borrower, are form 2106 unreimbursed business expenses deductions reducing that FHA borrowers income to qualify for a FHA loan. A FHA borrower can think they have the income to qualify for a FHA loan, and then once the FHA borrower’s federal tax returns are reviewed and unreimbursed business expenses are deducted from the FHA borrower’s income to qualify, they no longer qualify. FHA loan requirements require unreimbursed business expenses deductions to be deducted from the income used to qualify.
So if you want to get a FHA 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 FHA loan. So if you earn $80,000 a year in salary, but you have $30,000 in unreimbursed expenses, FHA loan requirements will only count $50,000 in income to qualify for the FHA loan. This FHA loan requirement can really totally surprise FHA borrowers who thought they were good to go to qualify for a FHA loan.
What the FHA loan mortgage lender will do is generally take your unreimbursed expenses from the last two years tax returns, average that amount, and then subtract that average from your income. So once again, just keep this in mind when you apply for a FHA loan in California.
Below are some of the latest up-to-date benefits of FHA loans in California:
- FHA loan guidelines only require 3.5% FHA loan down payment and this can be a gift from a relative
- FHA loan limits go up to $729,750 in many parts of California including Los Angeles, Orange County, San Jose, San Francisco and more. This FHA loan limit would allow you to buy a property for $756,ooo. San Diego FHA loan limit is $697,000.
- FHA loan credit score does not need to be perfect. We are specialists in assisting FHA borrowers in California repair their credit to be able to buy a home in California
- FHA loan guidelines are much more flexible than conventional loans with debt-to-income ratios
So please don’t hesitate to give us a call at 858-922-7899 or email at homeloan8@gmail.com to discuss getting approved for a FHA home loan in California.
Regards,
Rob Chomentowski
Sr. Loan Officer (FHA, VA, USDA, Homepath and conventional loan specialist)
858-922-7899
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