Seeking Insights on FHA Loan Eligibility for Independent Real Estate Agents

[Wencheur Antoin]

Hello BiggerPockets Community!

I hope this message finds you well. I'm currently exploring the possibility of applying for an FHA loan and had a couple of questions, and I'm eager to tap into the collective wisdom of this fantastic community.

1. FHA Loan Eligibility for Independent Real Estate Agents:

- As an independent real estate agent working on a 1099 basis, I'm curious about the employment verification requirements for an FHA loan. Traditional guidelines often require proof of employment for the past two years with a steady income. How does this apply to real estate agents who operate as independent contractors rather than W-2 employees? Can independent agents qualify for an FHA loan, and if so, what documentation might be necessary to satisfy the employment verification criteria?

2. Americans Working Abroad and Income Declaration:

- Additionally, I'm wondering about the scenario where an individual is an American citizen working abroad and did not fully declare all of their income or any income at all, how might this impact their eligibility for an FHA loan? Are there specific considerations or steps that need to be taken in such cases?

I greatly appreciate any insights, experiences, or advice you can share on these matters. Your collective expertise is invaluable, and I look forward to learning from your experiences.

Thank you in advance for your time and assistance!

Best regards,

Wencheur Antoin

[Mackenzie Grate]

Hi! It is my understanding that they use your tax returns to verify your income. As an independent contractor, it definitely is harder to get any loan. But if you have filed taxes for the past 2 years, and have shown consistent proof of funds, I'm pretty sure they will work with you. In terms of the AWA Income declaration, you are falling into a common trap that many people fall into. Any income you don't declare on your taxes does not count as income when you qualify. It's that simple. You may have earned it, but if there isn't a paper trail and proof you paid taxes on it, traditional lenders won't be able to use it to help you qualify. A lot of small business owners face this challenge by utilizing tax strategies to reduce their tax burden...it catches up to them on the flip side though. It then makes it look like they earned way less in the eyes of the government. So keep that in mind as you plan and file taxes moving forward. You may have to use a different type of loan, which of course wouldn't have as many benefits as the FHA loan. But there are commercial loans, private lenders and worst case scenario, hard money lenders you can use.

Hope this helps a little bit! Good luck and don't give up. Where there is a will, there is a way!