Employment Gaps and Your Mortgage: The FHA’s Stance

Employment doesn’t look like it used to, especially since the onset of the pandemic. Workers are in a state of transition, moving from 40-hour workweeks to jobs where they call the shots. As a result, we’re seeing more and more clients come into our office with gaps in their employment history. Is this a problem at the mortgage desk?

Not necessarily! When it’s time to shop for a mortgage in Pennsylvania, steady employment is ideal. If you have a blank space in your employment history, it might not be the end of the world. You might be able to work around a troublesome employment gap if you qualify for an FHA loan. At MortgageDepot, we’re here to show you how it’s done.

FHA’s Requirements for Borrowers With Employment Gaps

If you have a gap in your employment history, don’t give up on a mortgage. We have a plan! Depending on your specific circumstances, an FHA loan might be the ticket.

Here is a quick rundown of the requirements for qualifying for an FHA loan with an employment gap:

• If your employment history shows a gap of six months or more, you must be back to work for at least six months to use that income during the mortgage qualification process.
• Your work history must reflect stable employment for at least two years before the gap. We recommend getting a Verification of Employment (VOE) to support this requirement.
• These conditions apply to hourly and salary wage earners.

What About Multiple Jobs?

Although lenders might interpret having multiple jobs in a short time as employment instability, we know that’s not always the case. If you’re going the FHA route and you’ve had more than three jobs in the past year, be prepared to provide additional documentation to prove that you have stable employment. Due to the nature of their work, temporary staffing workers and union employees are exempt from this requirement.

Our Take-Home Message

If you’re worried about how your job history will be viewed by mortgage lenders, put your worries to rest. Stop in and have a chat with one of our experienced loan officers. We’ll help you determine if your employment history is a barrier to securing a mortgage in Pennsylvania. If that’s the case, we’ll go the extra mile to help you overcome the obstacle!

Contact us today or email us here to learn more about our mortgage solutions.