How many times have we seen Unreimbursed Employee Expense kill a mortgage transaction, and that’s because the unreimbursed expense needs to be subtracted from the borrowers income thus making the qualifying ratios higher and not allowing for the borrower to qualify for the loan any longer, so here is the solution that we have to offer, and this has saved hundreds of loan transactions. We now offer a W2 only program, that means that we do not use the borrower’s tax returns for qualifying purposes hence avoiding to show the unreimbursed expense on the borrower’s tax returns, we will only use the borrowers W2’s to qualify for the loan.

Here is how it works:

  • If the reason for the W-2 program is mainly to exclude Unreimbursed employee expenses,  and there are no other issues, then our underwriters will be okay just using W-2 transcript in place of the traditional 1040 transcript.
  • However, our wholesale lenders will still need the 1040 transcript (and the W2 transcript).
  • Since our lenders pay for these transcripts, please order them asap. No need to wait.
  • The underwriter will review the 1040 transcript and confirm there are no other issues (IE. if a borrower also has a Schedule E business and possibly Schedule E business losses that need to be included).
  • If the underwriter sees the only issue is the Unreimbursed Employee Expense, then they will disregard the 1040 transcript and use the W-2 TRANSCRIPT and EXCLUDE the Unreimbursed Employee Expense so it does NOT affect the Debt To Income ratios.
  • Please email us the borrower’s tax return(s) BEFORE we move forward with your loan. We can review and tell you if the loan will work under our W-2 program.
  • The W-2 program is also available for FHA!!

Please contact our office to discuss this W2 only program that has been a life saver for many borrowers.

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