The Mortgage Moment Blog: New Rules - How FHA looks at Part Time and Seasonal income for qualifying in 2012

New Rules - How FHA looks at Part Time and Seasonal income for qualifying in 2012

New Rules - How FHA looks at Part Time and Seasonal income for qualifying in 2012

Paycheck                 part time work for fha

Part-time/second job income, including employment in seasonal work, may be used in qualifying for FHA loans  if the lender documents that the borrower has worked the part-time job uninterrupted for the past two years and will continue to do so.

seaonal work for fha

Seasonal employment (e.g., umpiring baseball games , department store during the holiday season) may be used as income for FHA loans.  It is considered uninterrupted and may be used in qualifying if the lender documents that the borrower has worked the same type of job for the past two years and expects to be rehired during the next season.

Income from a part-time position that has been received for less than two years may be included as effective income, provided the lender justifies and documents that the income's continuance is likely. Income from part-time positions not meeting these requirements may be considered as a compensating factor only.

For qualification purposes, part-time income refers to jobs taken to supplement the borrower's income from regular employment (i.e., a second job – not meaning primary jobs of less than 40 hours per week.) If a borrower's regular employment involves less than a typical 40-hour workweek, the stability of that income should be evaluated as any other regular, on-going primary employment. For example, a registered nurse may have worked 24 hours per week for the last year. Although this job requires less than 40 hours of work per week, it is the borrower's primary employment and is to be considered effective income.

Resource HUD Handbook 4155.1: 4.D.2.d-e

So word to the wise make sure your lender checks and verifies the income used before you get in the car to show homes. 5 minutes double checking will save so much strife and stress prior to closing.

Thanks for stopping by and reading/commenting on my blog: New Rules - How FHA looks at Part Time and Seasonal income for qualifying in 2012

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Comment balloon 3 commentsMark Taylor Mortgages • April 10 2012 09:33PM

Comments

Thanks Marc.

This is good info to know.

Have a great day!

Kevin

Posted by Kevin A. Guttman-Author, Reverse Mortgage Advisor, 877-251-9709 (NMLS#384936) about 7 years ago

Great info, Mark.  Now, if we could just have some inventory to sell to our FHA clients!!!!

Posted by Juli Vosmik, Scottsdale/Cave Creek, AZ real estate 480-710-0739 (Dominion Fine Properties) about 7 years ago

I ran into this yesterday. I calculated income for a borrowers based on our conversation but upon doing some digging I learned that he was giving me a broad overview of his income totals. One of the 3 sources of income that he was counting was a second job that we cannot use for qualifyinf purposes. Wish I could help him but without it his DTI is 5 percentage points too high.

Posted by Christopher Ohlsen (Credit Werx, LLC.) about 4 years ago

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