Hi Gilligan 2404,
Here are the VA guidelines:
Below is an excerpt from chapter 4 which deals with income requirements.
a. Underwriterâ€™s Objectives
Identify and verify income available to meet:
â€¢ the mortgage payment,
â€¢ other shelter expenses,
â€¢ debts and obligations, and
â€¢ family living expenses.
Evaluate whether verified income is:
â€¢ stable and reliable,
â€¢ anticipated to continue during the foreseeable future, and
â€¢ sufficient in amount.
Only verified income can be considered in total effective income.
In addition, identify servicemembers who are within 12 months of release from active duty or end of contract term. Find the date of expiration of the applicantâ€™s current contract for active service on the LES (for an enlisted servicemember). For a National Guard or Reserve member, find the expiration date of the applicantâ€™s current contract.
If the date is within 12 months of the anticipated date that the loan will close, the loan package must also include one of the following four items, or combinations of items, to be acceptable:
â€¢ documentation that the servicemember has already re-enlisted or extended his/her period of active duty to a date beyond the 12-month period following the projected closing of the loan, or
â€¢ verification of a valid offer of local civilian employment following the release from active duty. All data pertinent to sound underwriting procedures (date employment will begin, earnings, and so on) must be included, or
â€¢ a statement from the servicemember that he/she intends to reenlist or extend his/her period of active duty to a date beyond the 12 month period, plus
â€¢ a statement from the servicememberâ€™s commanding officer confirming that:
- the servicemember is eligible to reenlist or extend his/her active duty as indicated, and
- the commanding officer has no reason to believe that such reenlistment or extension of active duty will not be granted, or
â€¢ documentation of other unusually strong positive underwriting factors, such as:
- a downpayment of at least 10 percent,
- significant cash reserves, and
- clear evidence of strong ties to the community coupled with a nonmilitary spouseâ€™s income so high that only minimal income from the active duty servicemember is needed to qualify.
Analysis: Base Pay
Consider the applicantâ€™s base pay as stable and reliable except if the applicant is within 12 months of release from active duty.
â€¢ Analyze the additional documentation submitted.
â€¢ If the applicant will not be reenlisting, determine whether:
- the applicantâ€™s anticipated source of income is stable and reliable, and/or
- unusually strong underwriting factors compensate for any unknowns regarding future sources of income.
It sounds to me like you may have a very conservative underwriter. If you have your VA awards letter showing what your disability pay will be, that should be good enough.