Fannie Mae recently came out with a fantastic change to the mortgage guidelines for Conventional loans. The guideline change has to do with The Unreimbursed Business Expenses on the Form 2106 on your Tax Returns. This is the area used for “write-off’s” in regards to your job such as clothing, car mileage, technology costs, etc. In the past these expenses were deducted from your income when qualifying for a mortgage. As of immediately, this is no longer the case for anyone that has “commission income that is 25% of their total income of less”. Of course that last statement is confusing, so in regular English this means that the Unreimbursed Business Expenses can be ignored for anyone that is paid hourly, salary, etc. If you own your own business or more than 25% of your income is commission these expenses are still deducted from your income.
Keep in mind, this change is only for conventional loans, not FHA, VA or USDA. Thou hopefully the other loans will follow this rule in the future. And if you do own your own business or more than 25% of your income is commission you can deduct business mileage from the total expenses deducted against your income. This is fantastic news for anyone that deducts Unreimbursed Business Expenses(form 2106) and is paid a salary, hourly or less than 25% of the income is commission!
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