Calculation Guidelines For USDA Loan Income

If you are looking into a USDA loan, be aware that there are USDA income guidelines you must meet before qualifying. The following will help you decide if you meet these USDA loan requirements.

USDA loan income requirements

As the borrower, your adjusted income may not exceed 115% of the United States median income. If you are considering Bond financing, then your income cannot exceed the 115 % area (income limits or median income is specified by the Bond Program.)

What is annual income for a USDA guaranteed loan?

The total gross amount of salaries, wages, overtime pay, fees, tips, bonuses, commissions, as well as other compensation for personal services of all of the adults living in the household.
The total net income from the operation of a business or profession, farm, interest, dividends, or personal property.
All regular and special pay, along with allowances for a member of the armed forces who is the borrower or spouse, even if that family member does not reside in the actual unit.
Payments from annuities, pensions, unemployment, insurance policies, social security, workers compensation, alimony, and any other form of periodic receipts.

What is not considered annual income?

Medical reimbursements.
Foster care payments.
Cash gifts.
Food Stamps.
Income from minors in the unit.
Capital gains or other lump sum additions.
Income exempted from a Federal Statute.
Additional military pay for being subject to hazardous contact with hostile fire.
Educational benefits.

What adjustments reduce annual family income?

$400.00 deducted from the annual income for every member of the family over 62 years old.
$480.00 deducted from the annual income for every minor child, disabled family member, or full time student.
Certain other expenses may be deducted if, when added together, these expenses exceed 3 % of the gross annual income.

Determining whether or not you meet USDA income guidelines can help decide whether you qualify for one of these zero down, 100% financed loans. Good luck!