Employment Requirements for FHA Loans
July 15, 2023
Steady Income
- Employment History
Lenders will typically require at least a two-year employment history. This doesn't mean you have to work for the same employer for two years; it just means that you need to have a continuous employment record during that time. - Gaps in Employment
If you have gaps in your employment history, you may still qualify for an FHA loan, but the lender will want to understand the reasons for those gaps. Be prepared to provide an explanation, and it's helpful if the gaps were due to factors beyond your control, like a medical issue or the birth of a child. - Income Consistency
While having a steady job is crucial, so is having a consistent income. If your income fluctuates significantly or relies on bonuses, commissions, or self-employment, you may need to provide additional documentation to prove your ability to repay the loan.
It's important to note that while the FHA has minimum credit score requirements, individual lenders may set their own standards. It's possible to find lenders who are willing to work with borrowers with lower credit scores, but you may need to make a larger down payment or meet other compensating factors.
Verification of Income
- Pay Stubs
You'll need to provide recent pay stubs that show your year-to-date earnings. These pay stubs help lenders confirm your income. - Tax Returns
Lenders may also ask for your tax returns for the past two years. This is particularly important if you're self-employed or have income from sources other than traditional employment. - Employment Verification
Your lender may contact your current employer to verify your employment status and income. - Written Verification of Employment (VOE)
You might be required to provide a written VOE, which is a document from your employer that confirms your job, income, and other relevant employment details.
FHA Loan Articles
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While renting offers relocation flexibility and lower upfront costs, homeownership provides a wealth of financial and personal benefits.
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November 12, 2024Escrow is an important feature of most typical FHA loans. An escrow account is a third-party account where borrowers deposit funds designated for property taxes and other uses. Requirements to use escrow accounts typically stems from a need to protect all parties involved in the transaction
November 2, 2024When it’s time to consider buying a home, the Federal Housing Administration (FHA) offers two popular options. One is the traditional FHA purchase loan many use to buy a house in the suburbs. But not everyone wants to buy an existing property. Some want more control over the design and configuration of the home.
The other FHA construction loan option, the one-time close mortgage, comes in here. This option is for those who want to approve floor plans, have a say in the types of materials used to build the home and choose its features.
