Alabama USDA Home Loan Program was designed to help moderate to lower income families achieve the goal of purchasing a home. Unlike other loans that have loan limitations, USDA has income limitations. Moderate income is considered as 115% of the median income or the average of the state median family income for the area in which the borrower is considering purchasing. Mortgage payments are also based on the income of the house hold, 26% of that to be used on mortgage payment.

When calculating your income to see if you qualify you must include all adults income, regardless of whose name is going to be on the loan. If you have an adult that has a previous job history, but is currently not employed, that income has to be included unless the adult does not foresee continuing working in the future. If an applicant acquires any bonus or overtime he/she must include that as well as the employers expectations of that continuing. Paying alimony, child support, or any other separate maintenance must be included in income and will not be considered a deduction in income. The applicant’s gross income will determine the size of the loan amount.

Understanding how lenders calculate your income is easy to do. Lender’s take a two year average of your gross income, including bonus and commission. Take your hourly rate and times it by 40(if you work an average of 40 hours a week). Take that number and times it by 52(weeks in a year), and divide that number by 12(months in a year). That will give you an average of how much you make a year. Hourly x 40 x 52/12 = average monthly pay.