June 13, 2013
A reader asks, “Info to qualify FHA loan–I only have one year proof of taxes (W2). Do I need to finish this year to try to qualify?”
While this question isn’t quite clear, it seems safe to assume the reader wants to know whether he or she meets FHA loan approval standards for an FHA mortgage. Let’s examine what FHA loan rules have to say about minimum employment history.
Those rules can be found in HUD 4155.1 Chapter Four Section D, which says:
“To be eligible for a mortgage, FHA does not require a minimum length of time that a borrower must have held a position of employment. However, the lender must verify the borrower’s employment for the most recent two full years, and the borrower must
• explain any gaps in employment that span one or more months, and
• indicate if he/she was in school or the military during the most recent two
full years, providing evidence supporting this claim, such as − college transcripts, or
− discharge papers.
Allowances can be made for seasonal employment, typical for the building trades and agriculture, if documented by the lender.”
That would seem to be good news for the reader, but it is important to note that FHA standards aren’t the only ones which may be applicable; the lender also has qualification standards and may require additional employment. It all depends on the borrower’s circumstances. You may need to comparison shop for a lender in these cases to find one willing to work with you in your specific circumstances.
And in some cases the circumstances may indeed require a borrower to get more employment history before applying for the loan–but again, these issues are handled on a case-by-case basis.
Do you have questions about FHA mortgages? Ask us in the comments section.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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