VA Update to Commission Income, Unreimbursed Business Expenses, and Auto Allowances

VA announced updates to the treatment of commission income in Circular 26-19-09 dated March 15, 2019 due to the recent changes in the tax law.

Commission Income

VA will no longer treat commission income differently based on the percentage received (currently requirements are based on whether the commission income is < 25% of the borrower’s total annual income or ≥ 25%).

Unreimbursed Business Expenses and Automobile Allowance

Unreimbursed business expenses will no longer be required to be subtracted from the gross commission income and IRS Form 2106 Employee Business Expenses is no longer required.  As such, the full amount of the automobile allowance received by the borrower may now be included as income.

Any lease or loan payment must continue to be included in the borrower’s DTI calculation.

The VA guidelines have been updated to reflect this information and posted on the Homebridge website at www.Homebridgewholesale.com.

If you have any questions, please contact your Account Executive.