Do not need tax transcripts (1040’s) for FHA & VA loans, if you are a W-2 employee.
FHA & VA loans no longer require a full tax transcript (4506-T) to be done if you are a W-2 employee. This does not apply if you a self employed or more than 25% of your income is commissioned income.
This helps people buying or refinancing, where their tax returns show losses from unreimbursed employee expenses (form 2106) or they have a self employment loss (schedule c) which is not their primary job. People who have unreimbursed employee expenses usually have to buy their own uniforms for work (fireman, policeman anyone in the trades etc.), or their own equipment or tools (mechanics, police officers etc.). This will also help someone who has a side self employment job where they show losses.
With this new rule the mortgage lender will only verify (4506-T) your W-2’s and 1099’s.
I have been in the mortgage business for over 20 yrs. and I see a lot of loans that get turned down because the customer had significant losses in employee business expenses or they have a side self employment job where they show significant losses. These losses are used against your current w-2 wage income. Make sure you are working with a lender who offers this program if you have unreimbursed employee expenses or a side self employment job where you are showing a loss. Barclay Butler Financial Inc. is offering this program.