How Your Income and Employment is Evaluated When You Apply for a FHA Loan is a post from: FHA,VA and Conventional Home Loans in all 50 States

 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

homeloan8@gmail.com