Workers Comp And Home Loans

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Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
Loan Safe Mortgage
Jan 14, 2011
San Diego, California
When you get injured at work and are on workers comp it can in many cases make it difficult to obtain a new home loan due to the guidelines and requirements behind it. There are cases where an employee is not returning to work and also cases where the employee is returning to work.

Below explains a couple scenarios you may be encountering:

Prior employee on workers comp, injured to the point of not being able to return to work:
In this circumstance the workers comp income will most likely not be able to be used as qualifying income unless it’s proven that the income will continue. For example, many of the people in this circumstance are applying for permanent disability and/or social security. As a lender we don’t know when or if the disability/social security will or will not be approved therefore cannot use this income. If you have been approved by disability/social security we are able to use that income with a one month proof of receipt and disability benefits/award letter.

Prior employee on workers comp planning on returning to work:
If a prior employee is planning on going back to work, we would need a letter from the employer stating the borrower is able to return to work and what the salary/income will be upon returning. We can use this income assuming the borrower will be returning to work by the first payment due date of the loan.

Please be careful as many lenders do not know the actual requirements behind obtaining a loan while on workers comp. VA for example will state that they will allow the workers comp income however they have their own guidelines in which many lenders have what is called “Overlays” which prevent them from being able to fund a new loan that VA may say is ok.

If you have any questions regarding this topic, please feel free to reach out to us directly at 800-779-4547