Income used to approve the borrower for an RD loan may not exceed the moderate income level issued by RD. To determine if your income meets the moderate income you can reference the RD website: http://www.rurdev.usda.gov/mi/sfh/MI%20GRH%20(2).pdf
Income calculation must be based on the income received by borrower, co-borrower and any adults within the household regardless if they are on the loan or not.
Moderate income limits are based on a projection of income for the 12 months. Additional factors to determining eligible income are taken into consideration such as: retirement income (social security, annuities, pensions, retirement funds), Alimony, child support, unemployment, insurance policy, disability, severance pay, AFDC, recurring cash contributions, net farm or business income or earned income tax credit, actual or computed from net family assets (when over $5000.00), net educational grants/scholarship/VA benefits and any other income.
Borrowers can also utilize deductions (on an annual basis) from the gross income to determine an adjusted gross income. The deductions are for any household member under the age of 18, household members that are handicapped or disabled (other than the applicant/co-applicant) over the age of 18, and any full time student (disabled adult student entitled to one deduction) over the age of 18, child care expenses, elderly family (one only), medical expenses (>3% of gross income)