What is typically considered as repayment income?

Repayment income is a crucial factor when evaluating an individual’s ability to manage a loan, particularly in the context of USDA Rural Housing Loans. Projected annual income for the household is considered repayment income because it reflects the amount of money the household is expected to earn within a year that can be used to meet monthly loan payments. This estimate is typically based on reliable sources, such as employment income, bonuses, and other consistent income streams, ensuring that the lending institution can assess the borrower's capacity to make timely payments.

Other options may represent forms of income or financial metrics, but they do not specifically capture the projected capability of the household to meet loan obligations over time. For example, while net income from the previous year may provide insight into past earnings, it does not account for changes in the household's financial situation, such as job changes or expected salary increases. Similarly, expected income from investments can be uncertain and is not necessarily guaranteed or stable, making it less reliable for the purpose of assessing loan repayment capacity. Income earned before taxes does not provide a clear picture of what is actually available to the household for repayments after tax obligations, which can vary substantially depending on the individual circumstances of each borrower. Thus, the focus on projected annual income for the household