Is income from employment that has not begun considered effective income for FHA home loan approval?
Is income from employment that has not begun considered effective income? Projected or hypothetical income is not acceptable for FHA loan qualifying purposes. However, exceptions are permitted to this rule for income from cost-of-living adjustments, performance raises, bonuses, etc., which are both verified by the employer in writing and scheduled to begin within 60 days of the FHA loan closing. If a FHA loan applicant is about to start a new job and has a guaranteed, non-revocable contract for employment that will begin within 60 days of FHA home loan closing, the income is acceptable for qualifying purposes. The FHA mortgage lender also must verify that the FHA loan applicant will have sufficient income or cash reserves to support the FHA mortgage payments and any other obligations during the interim between the FHA loan closing and the start of employment. (This condition may be appropriate for situations such as teachers whose contracts will begin with the new school year, or physicians who will begin residency after the FHA home loan is scheduled to close.) However, if the FHA loan will close more than 60 days before the FHA Mortgage applicant employment begins, the loan is not eligible for endorsement until the lender provides a pay stub or other acceptable evidence that the borrower has begun the new job.
Handbook 4155.1: 4.E.5.c-dPlease us know if I can help you with your FHA Home loan.
FHA loan Advantages Include:
Minimal Down Payment and Closing Costs.
Down payment less than 3.5% of Sales Price Gift for down payment and closing costs allowed. No reserves or required. FHA regulated closing costs. Seller can credit up to 6% of sales price towards buyers costs.
Easier Credit Qualifying Guidelines such as:
Minimum FICO credit score of 540. FHA will allow a home purchase 2 years after a Bankruptcy. FHA will allow a home purchase 3 years after a Foreclosure.
Easier Debt Ratio & Job Requirement Guidelines such as:
Higher Debt Ratio’s than other home loan programs. Less than two years on the job is allowed. Self-Employed individuals o.k.