Understanding how HOA is calculated for mortgage loan

J

jyeh74

New member
So I am going through a loan process and the UW forgot to take into account the monthly HOA since it was incorrectly captured under different section instead OTHERS in schedule E.  The hoa is a monthly expense so I was getting a negative monthly rental income.  Now that it has been added back, I am getting a positive monthly rental income.  Question is why do they add it back since hoa is an expense to begin with?
 
irvineboy said:
So I am going through a loan process and the UW forgot to take into account the monthly HOA since it was incorrectly captured under different section instead OTHERS in schedule E.  The hoa is a monthly expense so I was getting a negative monthly rental income.  Now that it has been added back, I am getting a positive monthly rental income.  Question is why do they add it back since hoa is an expense to begin with?
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They shouldn't add back the HOA expense since it is a cash expense.  The UW should only be adding back the depreciation expense since it is a non-cash expense.
 
Yeah I was confused at first.  They explained that HOA is captured under PITIA and they cannot count it twice for UW purposes and that?s why they add it back.  Maybe someone in loans can better explain it.
 
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