Getting an FHA Loan With a Part Time Job
Today’s home buyers have various sources of income and the days of the traditional 9 to 5 job are becoming a distant memory. People are multiple sources of income and many people have a part time job either as a supplement to their full-time income or two part time jobs as their primary source of income.
Lenders typically want to see steady employment over the past two years with no gaps. They also want to see steady and consistent income over that time period with no declines.
Can You Get an FHA Loan with a Part Time Job?
According to the FHA home loan handbook, borrowers can qualify for an FHA loan with a part time job if the borrower has worked the part-time job uninterrupted for the past two years and can demonstrate the position is likely to continue. FHA guidelines will allow the part time job to be supplemental income or the primary source of income.
FHA General Guidelines on Employment
- Borrowers are required to be employed for the past two years with no gaps*
- Borrowers do not have to hold one position for any specific length of time, but FHA Lenders must verify the borrower’s employment in sequential jobs for the past two years.
- If there are any gaps in employment, borrowers must provide an acceptable explanation for those gaps.
- Seasonal employment such as construction or resort employment may be acceptable if the balance of the year is spent working a different job that can also be documented.
*Exception to the gap rule is if you were attending school or in the military. In either case, you would need to provide proof.
FHA Employment Verification
FHA Lenders are required to do a VOE (Verification of Employment) for all jobs going back two years. They will verify the dates are accurate to ensure there are no gaps.
FHA Lenders also attempt to get confirmation from your current employer that their intent is to keep you employed.
If you are job hoping and have had multiple jobs over the past two years, the lender may overlook that if your various jobs were in the same line of work.
When there are multiple jobs over the past two years and they are in different lines of work, then the lender may be required to obtain the following:
- Documentation of training or education that indicates you are qualified for this new field of work
- Documentation that your income has increased each time you changed jobs
Qualifying for an FHA Loan When the Part Time Job is a Second Job
If you have a full time job and also a part time job for supplemental income, you will need to provide documentation to the FHA lender that this part time income has been consistent for the past two years and that it is likely to continue.
This will also be verified when the lender calls your part time employer to do the verification of employment. Employers often cannot verify the income which is why you will need to
Qualifying for an FHA Loan when the Part Time Job is Your Only Job
There are many borrowers who only have a part time job as their source of income and want to buy a home. There are also people who have what amounts to two-part time jobs as their source of income. They may also have a seasonal job in the summer and then a different job in the winter.
If one of these scenarios is similar to your situation, then you may still qualify for an FHA loan. Your employment and income will need to be verified as referenced above.
Your average monthly gross income will also need to be sufficient to qualify based upon FHA income guidelines.
Emphasis on Job and Income “Likely to Continue”
The HUD 4000.1. document frequently references the idea that both the job and income must be “likely to continue”. This is very subjective, and the FHA Lender’s underwriter will probably make the final determination.
Summary FHA Loan with a Part Time Job
You can see that you can qualify for an FHA loan with a part time job even if that job is your only source of income. You can also qualify if your part time job is your second job. FHA lenders will use that income to help you to qualify.
It is important to note that FHA Lenders have the ability to overlay their own guidelines that may be less flexible than what was outlined above. If you have part time employment and you are interested in an FHA loan, let us help you to find an FHA lender that will allow for part time income. In less than 24 hours, you will know whether you qualify.
How long to you need to be at a job for an FHA loan?
There is no specific length of time requirement for any one job. However, you will need two full years of employment to qualify even if it is multiple jobs during that time period.
Can I qualify for an FHA loan if I am paid cash?
You can qualify for an FHA loan making cash, but you will need to document that cash on your tax returns. Depositing that cash into your bank accounts to show a flow of income will also help.
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