Is getting a VA Loan impossible for self employed?

Asked by Icarus66, Newark, CA Fri Oct 25, 2013

I am a self employed, just got denied a VA Loan because my returns don't have the documented income to purchase a house here in expensive California. Veteran's United turned me down.

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John Dutra, , Fremont, CA
Fri Oct 25, 2013

VA is no different than a conventional loan as far as calculating income.

The issue with being self-employed is that accountants will advocate that you take every tax benefit possible (I know as I am self-employed) which sounds great. But as you look at your Schedule C (used for showing gross and net incomes for the self-employed), lenders only use the "net" income for use in judging qualifying ratios. They also will want to see 2 years of self-employed income before it can be used in most cases.

Look at your Schedule C and look at the net (not the gross) income and see if that may be the issue (income to low to qualify). If there is something that I can do (review your last 2 years returns) to help you, please let me know. It may help you in the future (prior to doing your 2013 returns).
2 votes
lendersnetwo…, Agent, Plano, TX
Fri Nov 1, 2013
I have a lender or two in CA that work with all sorts of difficult situations like yours, go to our site and I will see what we can do for you..
2 votes
Laura Coffey, Agent, Santa Clarita, CA
Fri Oct 25, 2013
I don't think it's a matter of being VA. I am self employed and I had to prove my income if my tax returns. You can not claim a bunch of deductions and still think you will qualify for any loan.
1 vote
Kawain Payne, Agent, Seal Beach, CA
Fri Oct 25, 2013
Getting approved for a VA loan is just about the same process as getting approved for any other loan type.

Self employed people have the benefit of reducing their income by cost of doing business, this will minimize their tax liability.

The down side is the reduced documented income makes it hard to get loans.

You will be evaluated by the income you are able to document.

You may have to show more income on your return and try again.

Best Of luck to you!!

Kawain Payne, Realtor
1 vote
Brian Nguyen, Mortgage Broker Or Lender, Mission Viejo, CA
Fri Feb 14, 2014
It is possible to obtain a VA loan if you are self-employed! There are lenders like myself that are able to give out VA loans to individuals who are self-employed. You may have to jump through a few hoop and turn in some extra documents but it is possible with the right lender. I recommend that you don't give up and continue to shop around for the right lender that would best fit your situation. Lenders like myself would be glad to speak with you to help guide you to the loan that you need. Well I hope this helps, if you have any other questions or need a loan please contact me through the information on my profile page. I hope this helps! Good Luck! Brian Nguyen Sr. Mortgage Banker NMLS # 659743 Phone: 949.667.2887
0 votes
Claudia Mull…, Mortgage Broker Or Lender, Fremont, CA
Mon Oct 28, 2013
VA underwriters are trained to look at your tax returns as per the guidelines of VA.
When self employed, we take all the write-offs we can and then, for qualifying purposes, have trouble qualifying for the home loan.
It is not impossible.
You may just need to lower your purchase price point.
0 votes
John Juarez, Agent, Fremont, CA
Fri Oct 25, 2013
If you can verify your income through your tax returns, you can qualify if your income is sufficient for the loan amount needed for your purchase. Being self-employed is a barrier in so far as self employed people tend to use advantageous and legal tax methods with which to report low income in order to pay the least amount of legally required income tax.
0 votes
Brian Ripp, Agent, Fremont, CA
Fri Oct 25, 2013
You can talk to other lenders and see if there is either another program or maybe they can do it. Every loan has qualifications, even a refi needs the same doc's. Try a mortgage broker who have several loan programs, I'm sure there must be one for you.

0 votes
Thanks Brian. I appreciate your response.
Flag Fri Oct 25, 2013
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