Home Buying in 20037>Question Details

David Naffis, Home Buyer in 20037

How is self-employment determined. What if you owned 30% one year and then 20% the next. Is it based on what your current stake is or previous too?

Asked by David Naffis, 20037 Fri May 6, 2011

I am applying for an FHA loan and am receiving conflicting information.

I owned 30% in the company I work for in 2009 and then 22% in 2010 and currently. Would I be considered self-employed? Can someone direct me to the FHA guidelines that spell this out?

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Answers

5
If you can prove your decrease in Ownership percentage, i.e. stock sale or transfer and have W2's, which the IRS will verify have been reported on your 1040 then you would not be clasiffied as Self Employed. You can call me at 202-216-5702 for more information next week.
Web Reference: http://www.jfsettles.com
1 vote Thank Flag Link Sat May 7, 2011
It doesn’t matter if you are self employed or not, they are required to look at the entire picture. In our shop we order tax transcripts for the previous 2 years on every loan application, I always request full tax returns for both years to see if there are any business deductions. The problem isn’t classification, it is net income. If a buyer is a regular W2 wage earner but has a side business that looses money, it is the same as being fully self employed. The deductions are going to count against them.

Why is this creating a problem?
0 votes Thank Flag Link Thu Jun 2, 2011
What is the conflicting information you are receiving? I would look at the gross income on your tax returns to determine your employment status.

David Cooper. Foreclosure and Bank Owned REO Buyer's Agent with Vertical Realty, Las Vegas Freee List
Call +1-7024997037 davidcooper@lasvegaswinner.org
0 votes Thank Flag Link Thu Jun 2, 2011
Hi, the FHA website is great and spells everything out quite clearly. I would also check with your favorite tax accountant who will often have these specifics downpat since it has quite a bearing on ones taxes.
0 votes Thank Flag Link Thu Jun 2, 2011
Your best bet would be to contact a loan officer who could walk you through the process. If you are self-employed, normally lenders look at tax returns, often the last two years and even possibly a profit and loss statement for the current year. I think the normally a lender would take an average of your income to qualify you for a loan. FHA guidelines tend to be somewhat more generous as far as ratios go. I can put you in touch with a list of preferred lenders, if you wish to contact me at: billpanici@aol.com, or (202)277-4675. I look forward to hearing from you.
0 votes Thank Flag Link Sat May 7, 2011
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