April 22, 2015
A reader asks, “Would I still be eligible for an FHA Loan if I accept a position that with a higher salary with a different employer? Ive been on my current job for almost 7.5 years. My new and current positions are in different fields. However, the new position is in the same field as that I was in prior to my current job.
I was told that longevity on the job was part of the criteria aside from creditworthiness, debt/income, etc. I dont want to miss this opportunity to purchase a home and I dont want to miss this job opportunity.”
Let’s examine what FHA loan rules have to say on this subject–part of the answer to this reader question is found in Chapter Four, Section D of HUD 4155.1. It says in part:
“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 borrowers 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.”
Those are the FHA loan rules. However, lender standards may also factor in–what are the lender’s requirements in this area? It depends on the financial institution. The best thing a borrower can do in a situation like this is discuss the issue with a loan officer to see what may be needed to qualify for a loan, whether that’s a minimum amount of time on the job, documentation of the new income source, contracts or work agreements, etc.
Of course, the nature of the new employment could also be a factor that works in the borrower’s favor–a new job with a higher salary, more benefits, etc. could be taken into account when the lender is trying to make a decision on the loan.
No two lenders are the same and while FHA loan minimum standards do permit a borrower who has taken a new job to apply for a mortgage loan as described above, the lender’s standards must also be considered.
Do you have questions about FHA home loans? Ask us in the comments section. All comments are held for review.
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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