There is no minimum length of time an applicant must have held a position to
consider employment income as dependable.
Lender must verify the applicant’s employment for the most recent 2 full years
& verify that the applicant’s income has been stable.
The applicant should not have any gaps in employment of more than a month
within the 2 year period prior to making the loan application.
Applicants that have not been employed for 12 months with their current
employer or have experienced a significant earnings increase are considered high
• Second jobs, full 2 year history
• Unearned income, 3 year continuance
• Self‐employed applicants, 2 year history
Less than a 2-year employment & income history can be considered when documentation = applicant was attending school immediately prior to current employment.
School Program/Classes must correlate to job!
For those applicants about to start a new job:
Firm offer letter from new employer indicating the job will begin within 60 days of loan closing
Re-entering the Workforce:
Applicants who re-enter the workforce after an absence to care for a family member or minor child,
extended medical illness, or other reasonable circumstances & less than 2-year employment &income history: May be considered for repayment income if the applicant has been at the current employer for a minimum of six months and there is evidence of a previous employment history
Significant increases or decreases in income level:
Experienced a Significant Decrease?
Previous higher income cannot be averaged for repayment purposes
unless there is documentation of a one-time occurrence (e.g. injury)
that prevented working or earning full income for a period of time & proof that the applicant
is back to the income amount that they previously earned. Focus on the most recent earnings
and income that is likely to be received at the level used for qualifying.
Experienced a Significant Increase?
Proposing to qualify the applicant at the higher amount?
NEED: sufficient documentation to confirm the increased income is stable and likely to
continue at the level used as part of the written analysis
Fixed Income like Social Security, SSI, non-taxable income:
• May be grossed up 25% for repayment
• Do not gross up for annual income
• No other adjustments are authorized
Text or call phone: (502) 905-3708
The view and opinions stated on this website belong solely to the authors, and are intended for informational purposes only. The posted information does not guarantee approval, nor does it comprise full underwriting guidelines. This does not represent being part of a government agency. The views expressed on this post are mine and do not necessarily reflect the views of my employer. Not all products or services mentioned on this site may fit all people