FHA Employment History Guidelines For Mortgage Borrowers

ByGustan Cho

This Article Is About The FHA Employment History Guidelines For Mortgage Borrowers

For a home buyer to qualify for an FHA loan, HUD Guidelines require a minimum of two years of employment history per FHA Employment History Guidelines For Borrowers. Under FHA Employment History Guidelines, employment history does not have to be two-year consistent employment history with the same employer. Per FHA Employment History Guidelines For Borrowers, gaps in employment are allowed and borrowers can have multiple jobs in the past two years.

FHA Employment History Guidelines On Past 2 Years

Two years of overall employment history needs to be documented:

  • Many mortgage loan applicants believe that they do not qualify for FHA Loans because they do not have two years consistent employment history with the same company
  • This is absolutely not the case
  • Borrowers can have gaps in employment and still qualify for an FHA insured mortgage loan
  • Borrowers could have had multiple different jobs in the past two years and as long as they have been in the same field, they will qualify for an FHA loan

In this article, we will discuss and cover FHA Employment History Guidelines For Mortgage Borrowers.

Periods Of Unemployment

Borrowers unemployed for six months or less and got a new full-time job can qualify for FHA Loans:

  • Full verification of employment from a new employer verifying full-time status is required
  • Also, the likelihood of employment for the next three years will be required
  • 30 days of paycheck stubs will be required before the underwriter issues a clear to close
  • Borrowers unemployed for six months or more and got a new full-time job can qualify for a mortgage after six months with a new employer
  • For example, say the borrower was unemployed for two years and just got a new job and want to qualify for a mortgage
  • They can qualify for a mortgage six months after starting a new full-time job
  • Many folks think that they need to be on their new job for two consecutive years in order to qualify for a mortgage
  • But that is not the case

Borrowers just need an overall two-year employment history and gaps in employment are allowed.

FHA Employment History Guidelines On College And Trade Schools

If a mortgage loan applicant has been a professional student and has no employment history, college or trade school transcripts can be used in lieu of employment history. Full-time schooling counts the same as work history.

  • For example, if a law student did not ever have a job since he was a full-time student
  • just graduated from law school
  • now has a full-time job as an attorney
  • this mortgage applicant will definitely qualify for a mortgage  because they can supply their law school transcripts in lieu of two years employment history
  • Same situation with a mechanic where they could have been enrolled in a two-year auto mechanic technical school where they had no prior employment history
  • The Auto mechanic technical school transcripts can be used in lieu of the mandatory two-year employment history

Gustan Cho Associates has no mortgage overlays on government and conventional loans. Borrowers who need to qualify for a mortgage with a mortgage company licensed in multiple states with no lender overlays, please contact us at Gustan Cho Associates at 800-900-8569 or text us for a faster response. Or email us at gcho@gustancho.com. We are available 7 days a week, evenings, weekends, and holidays. Gustan Cho Associates is also a correspondent lender on non-QM loans and bank statement loans for self-employed borrowers.

Similar Posts