HPSP and VA loan

[Jtun84]

I have a question for anyone who has bought a house while in the HPSP program. I have good credit and met all the requirements to get a VA loan (prior service active duty.) We were pre approved and were about to close when the VA underwriters began asking questions about the my stipend. I sent them letters from the recruiter explaining the program, brochures, LES's etc. However, they came back and said that the stipend was not income (although it certainly is taxed as such) and denied the loan just prior to close.

Has anyone been successful in receiving a VA loan using their HPSP stipend? Having dealt with the VA before I don't know whether or not this is an actual policy (possible) or whether a VA civilian didn't understand the program and instead of doing any work they just denied it outright (likely.) I was hoping one of you had gone through this and could save me the 6 hours it would take to get through to the VA helpline.

---

Members don't see this ad.

 

[haujun]

I have a question for anyone who has bought a house while in the HPSP program. I have good credit and met all the requirements to get a VA loan (prior service active duty.) We were pre approved and were about to close when the VA underwriters began asking questions about the my stipend. I sent them letters from the recruiter explaining the program, brochures, LES's etc. However, they came back and said that the stipend was not income (although it certainly is taxed as such) and denied the loan just prior to close.

Has anyone been successful in receiving a VA loan using their HPSP stipend? Having dealt with the VA before I don't know whether or not this is an actual policy (possible) or whether a VA civilian didn't understand the program and instead of doing any work they just denied it outright (likely.) I was hoping one of you had gone through this and could save me the 6 hours it would take to get through to the VA helpline.

I really don't think HPSP stipend alone qualifies you to purchase a home. I also would not recommend purchasing home during military unless you think you can stay same place for (residency/fellowship/payback).

 

[AFIM]

I would think the stipend qualifies as income. However, if your margin of income qualification is so slim that it depends on your pittance of a stipend in order for you to qualify, maybe you aren't in a financial position to be buying a home. I would never have purchased a home while in medical school.

 

[DocRGR]

Had the exact same problem, my wife and I ended up doing a traditional mortgage. Short answer, wish I had a solution for you.

 

[iglord]

My wife is HPSP, and I am an Air Force vet. We bought a home using my VA loan eligibility using her stipend as our verified income through MetLife. HPSP stipends absolutely count as income, the fact that you are taxed on it and receive a W-2 helps in that claim. However, other sources that are considered irregular or not subject to tax will probably not be used, such as Post 9/11 GI bill stipends or unemployment benefits. It also helped that my wife got a letter from her recruiter stating her estimated annual pay (including summer active duty), and the fact that she will immediately begin serving a couple years of AD as an O-3.

We bought last July, our mortgage, taxes and insurance work out to about half of the stipend, and we have no consumer debt. Without knowing your specific circumstances, while you were pre-approved by the lender, the underwriters may not have liked any potential debt ratios based upon local real estate costs compared to your balance of income and debt.

I hope that helps!