Trouble with Financing a deal?

Question

I am a travel Physical Therapist Assistant by trade and make great money BUT i get paid way more in my check “PER DIEM” than hourly pay because it is tax free.

That said, I have been trying to get a FHA LOAN and got denied by underwriting because they say my PER DIEM isnt “Income” nor am i able to get conventional

Found a great deal and ready to put in a bid and just find finances elsewhere If  ACCEPTED. What should I do?

Breelon Bryant · Answer

@Chris Mason i agree 100%. Especially when it is consistent pay and you can see my income outweighs my expenses. And a career field where jobs are plentiful and middle class. Its like being punished for making the right decision to go to school, get a job, go to work, and NOT be able to by a house is disrespectful.

Chris Mason · Answer

Folks in professions like yours need to talk to your unions, or whatever, and get pay raises in exchange for the per diem being reduced.

I think the opportunity cost of it being harder to become a homeowner, and/or higher interest at the non-qm rate/fee structure, overall far outweighs the tax savings.

I have a list of things I'd do if somehow magically found myself on the board of directors of Fannie Mae, this is on it. Other forms of non-taxable income, such as a veteran with permanent disability income, we can actually count the income at 125% of value (since it is not taxed). The argument in cases like yours is that the per diem is for something, ergo we must assume it all gets spent on that something, but that EXACT same argument would nuke VA disability income (people with disabilities incur expenses that me with my 2 eyes and all 4 limbs do not), so why are they treated differently?

Breelon Bryant · Answer

@Chris Mason yes thats the route i plan on taking now. It sucks because my LTV is so good because i make great money and have only student loans as debt and thats it.

Chris Mason · Answer

Yup, that's the kicker. Your employer and you are telling the IRS it's not taxable as income because it's not income, otherwise it would be taxable as income. And by doing that, you just told the FNMA/FHA/FHLMC/VA/USDA/etc underwriter the exact same thing: "It's not income." Unfortunate that you were not told this upfront back when you started the house hunt, hopefully some lurkers find this and benefit. :\

The person above me is correct, this would have to be one of the "alternative documentation" type loans, sometimes called "non-QM."

Stephanie P. · Answer

@breelon Bryant

You need a bank statement program, but you will need at least 10% down.

Trouble with Financing a deal?

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