This ARTICLE On FHA Guidelines On Income And Employment Gaps Was PUBLISHED On November 9th, 2020
FHA Guidelines On Income And Employment Gaps For Home Buyers
Home Buyers do not need to be employed in the same job for the past two years to qualify for FHA Loans. FHA Guidelines On Income And Employment Gaps for home buyers was recently released in March 2019 under HUD’s FHA 4000.1 Handbook.
- HUD requires two years of employment history and two years of residential history
- HUDs two-year employment history requirement does not mean that a borrower needs to be employed with the same employer for two continuous years
- Gaps in employment are permitted in the past two years
- Unfortunately, most mortgage lenders have mortgage lender overlays
- Overlays are lending requirements that are above and behind those of minimum HUD Guidelines imposed by individual lenders
- Gustan Cho Associates is a national mortgage company licensed in multiple states with no lender overlays on government and conventional loans
In this article, we will discuss and cover FHA Guidelines On Income And Employment Gaps.
Lender Overlays On Employment Gaps
They require two years of employment history with the same employer and no employment gaps in the past two years as part of their own lender overlays:
- Borrowers who are told they do not qualify for an FHA Loan due to employment gaps, please contact us at Gustan Cho Associates at 262-716-8151 or text us for a faster response
- Or email us at firstname.lastname@example.org
- We have no FHA Lender Overlays on FHA Loans
- Gustan Cho Associates has no overlays on government and conventional loans
- Borrowers with multiple gaps in employment can qualify for FHA Home Loans
In the following paragraphs we will go over the qualification requirements to qualify for a mortgage with gaps in employment in the past two years.
FHA Guidelines On Income And Employment Gaps: Full-Time Employment
FHA Guidelines On Income And Employment Gaps state if unemployed for six or more months and got a new full-time job, borrowers need to stay on a new full-time job for at least six months to qualify:
- Mortgage applicants do need two years of employment history
- But the two years of employment history does not need to be continuous
- Lenders do like to see mortgage loan borrowers be in the same job for the past two years but that is not an FHA Guidelines
- 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 an FHA Guideline
- That call is up to mortgage underwriter discretion
If the mortgage loan borrower has had a change in employment within the past six months and got a new full-time job before the six months gap in employment requirement, there is no seasoning requirement on a new full-time job.
- 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
FHA Guidelines On Income And Employment Gaps: Multiple Jobs In Past 2 Years
FHA Guidelines On Income And Employment Gaps with multiple jobs in the past two years will require a letter of explanation as to 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 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
- However, mortgage underwriters have the authority to use underwriter’s discretion in denying a loan applicant with multiple jobs in the past two years
- This is especially if the borrower has jobs that have declining incomes and fewer hours of employment
- Underwriters need to feel comfortable the new full-time job and income will likely to continue for the next three years
- Again, this is a case by case matter and ultimately will rely on mortgage underwriter’s discretion
Per FHA Guidelines On Income And Employment Gaps, borrowers can have gaps in employment in the past two years and qualify for FHA Loans. Home Buyers and/or Homeowners who need a national direct mortgage lender with no overlays on government and/or conventional loans, please contact us at Gustan Cho Associates Mortgage Group at 262-716-8151 or text us for a faster response. Or email us at email@example.com. The team at Gustan Cho Associates is available 7 days a week, evenings, weekends, and holidays.