New 2016 FHA Guidelines On Employment Gaps

2016 FHA Guidelines On Employment Gaps For Home Buyers

2016 FHA Guidelines On Employment Gaps for home buyers was recently released on September 14, 2015 under HUD’s FHA 4000.1 Handbook. FHA requires two years employment history and two years residential history from all FHA mortgage loan borrowers. FHA’s two year employment history requirement does not mean that a FHA mortgage loan borrower needs to be employed with the same employer for two continuous years and gaps in employments are permitted. Unfortunately, most mortgage lenders have mortgage lender overlays where they require two years of employment history with the same employer and no employment gaps in the past two years. If you are told that you do not qualify for a FHA Loan due employment gaps, please contact me at 262-716-8151 anytime and I can help you. We have no FHA Lender Overlays on FHA Loans and can qualify you with multiple gaps in employment and just follow FHA mortgage lending guidelines only.

2016 FHA Guidelines On Employment Gaps: Full Time Employment

2016 FHA Guidelines On Employment Gaps is if you have been unemployed for six or more months and got a new full time job, you need to stay on your new full time job for at least six months in order for you to qualify for a FHA Loan. You do need two years employment history but the two years employment history does not need to be continuous. Mortgage lenders do like to see mortgage loan borrowers to be in the same job for the past two years and/or if they have changed jobs, they like for them to be in the same field for the past two years. However, being in the same field with changing jobs is not a FHA Guideline and that call is up to mortgage underwriter discretion.

If the mortgage loan borrower has had change in employment within the past six months and got a new full time job before the six months gap in employment requirement, they can qualify for FHA Loan with a job offer employment letter but cannot close on their FHA Loan until they can provide 30 days of paycheck stubs.

2016 FHA Guidelines On Employment Gaps: Multiple Jobs In Past 2 Years

2016 FHA Guidelines On Employment Gaps with multiple jobs in the past two years will require letter of explanation as of why the borrower had multiple jobs in the past two years. If it is the case of one better job offer after another due to the talent of the worker and higher income opportunities, than it is perfectly acceptable. However, mortgage loan underwriters will question on why a borrower would have multiple jobs in the past two years. There is no set rule with FHA that a borrower with multiple jobs in the past two years cannot qualify for a FHA Loan. However, mortgage loan underwriters have the authority to use underwriter’s discretion in denying a mortgage loan applicant with multiple jobs in the past two years, especially if the borrower has jobs that have declining incomes and less hours of employment. Again, this is a case by case matter and ultimately will rely on mortgage underwriter’s discretion.

The information contained on Gustan Cho Associates website is for informational purposes only and is not an advertisement for products offered by The Gustan Cho Team @ Gustan Cho Associates or its affiliates. The views and opinions expressed herein are those of the author and/or guest writers of Gustan Cho Associates Mortgage & Real Estate Information Resource Center website and do not reflect the policy of Gustan Cho Associates Lenders Network, its officers, subsidiaries, parent, or affiliates.

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