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
November 4, 2023In May 2023, USA Today published some facts and figures about the state of the housing market in America. If you are weighing your options for an FHA mortgage and trying to decide if it’s cheaper to buy or rent, your zip code may have a lot to do with the answers you get.
October 14, 2023FHA loan limits serve as a crucial mechanism to balance financial sustainability, regional variations in housing costs, and the agency's mission to promote homeownership, particularly for those with limited financial resources.
September 25, 2023Mortgage rates are hitting prospective homeowners hard this year and are approaching 8%, a rate that didn't seem very likely last winter. With so many people priced out of the market by the combination of high rates and a dwindling supply of homes.
September 19, 2023The FHA Handbook serves as a crucial resource for mortgage lenders, appraisers, underwriters, and other professionals involved in the origination and servicing of FHA-insured home loans. It outlines the policies and requirements for FHA-insured mortgages.
September 13, 2023FHA rehab loans are a specialized type of mortgage loan offered by the Federal Housing Administration that allows borrowers to finance both the purchase or refinance of a home and the cost of needed repairs.
