FHA Loan Rules for Employment

How long does the FHA require an applicant to be on the job before he or she is eligible to apply for a loan? There are sometimes misconceptions about these requirements on a basic level, and there are important questions that some may worry about going into the FHA loan application. What if an FHA loan applicant has recently changed jobs, or experienced a gap of employment?

The rules that defined these issues when this article was originally published were explained in HUD 4155.1. They noted at the time, but may now be different:

• 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.”

The FHA has specific requirements for documentation of employment gaps and other related issues--these are explained in Chapter Four.

• the borrowers past employment record
• qualifications for the position
• previous training and education, and
• the employers confirmation of continued employment.”

• is employed in the current job for six months or longer, and
• can document a two year work history prior to an absence from employment using traditional employment verifications, and/or copies of W-2 forms or pay stubs.”

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