This post is a review of how your income and current employment will be evaluated in the FHA loan approval process.
Latest two years of employment verified
FHA likes to see two years of stable employment. There are many exceptions however for gaps in employment. For example, if you are just graduating from college or professional training, you do not need two years of employment as long as you can document that you were in school previously and you are now employed in your profession of study. And there are many, many exceptions. Please inquire about your situation.
Overtime and bonus income
To count this you must have received this income for 24 months and we will average this income over the last 24 months. There must be evidence it will continue.
Part-time employment
Must have a two year history
Commission income
You must have a two year history and we will average this income over the last 24 months. Your last two years federal tax returns all pages are required to calculate this income.
Unreimbursed business expenses (2106)
These expenses will be subtracted from you qualifying income.
Alimony and child support income
You can count this income towards qualification if it will continue for three or more years and you will need to provide the divorce decree and 12 months evidence of receipt of funds. This income can be multiplied by 1.25 since it is not taxed.
Government assistance
This can be counted as income if you can document it will continue for three more years.
Self-employed or 1099 independent contractors
You will need to supply you last two years tax returns all pages and schedules and your NET business income will be what is used as you qualifying income. There are a lot of details regarding self-employed income, please call or email me with questions.
So that is a brief review of some items that will be needed and how your income and job history will be evaluated when applying for a FHA loan.
Give me a call (858-922-7899) or email (homeloan8@gmail.com) if you have any questions about your employment history or income, or any other questions at all about getting approved for a FHA Loan.
Warmest Regards,
Rob Chomentowski
Sr. Loan Officer (and FHA specialist)
858-922-7899
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