Hey everyone, my wife and I are trying to buy a home, but I don’t qualify alone, and my wife just started a job less than a year ago. Are there any FHA lenders that might accept her income even though she doesn’t have two years of work history?
If she’s recently back to work after being a stay-at-home mom, you might be okay. Often, just showing a two-year history is enough, even if she’s had a gap. Don’t limit yourselves to FHA—let the lender guide you on the best program for your needs.
What did she do before starting this job? If she had work history before, it might help with qualifying on her own.
Sayer said:
What did she do before starting this job? If she had work history before, it might help with qualifying on her own.
She worked in the same job for four years, but it was under the table.
@Eli
You’ll want to pull together a work history. Maybe previous jobs, schooling, or anything that can help piece it all together.
@Eli
Could her employer verify any part of that time she worked under the table? Lenders want to see a stable work history.
Kiran said:
@Eli
Could her employer verify any part of that time she worked under the table? Lenders want to see a stable work history.
Rocket Mortgage told us she needs two years of tax returns for proof.
@Eli
Yeah, I wouldn’t use Rocket. They’re mostly about quick, straightforward loans through their call center.
@Eli
Is she self-employed now?
Kiran said:
@Eli
Is she self-employed now?
No, she’s a nanny, but her bosses kept her off the books for four years until she insisted on being placed on the books six months ago.
Kiran said:
@Eli
Is she self-employed now?
No, she’s a nanny, but her bosses kept her off the books for four years until she insisted on being placed on the books six months ago.
Find out if she’ll be getting a W2 at the end of the year. Since she worked off the books before, lenders might consider her self-employed, which would need two years of tax returns. If she’s now getting a 1099, she’s still technically a contractor, so tax returns would be required. But if she’s on a W2 now, it shouldn’t be an issue. The easiest way to document previous income is still with tax returns. If she hasn’t filed, that might be something to look into.
@Eli
Your best bet is to call a broker and go through a full application.
This is one reason working under the table can cause issues. You may have to wait until she has two years of documented income.
There are exceptions if someone’s been back to work for a full year, or if they took a break to be a stay-at-home parent or caregiver and recently returned. Loan programs want to know the income is stable and likely to continue. If your wife is a nanny, does she get paid as a W2 employee or a 1099 contractor? If she’s 1099, her tax returns should show her income, which is what lenders look at. If she hasn’t claimed past income, she could consider amending her tax returns for past years and report her income as self-employed, even though it means paying back taxes. This would give her a documented income history. But if she’s now on W2, that’s better since it’s stable employment. Ask a loan officer to review all your options before deciding.
Some lenders accept one-year employment if she’s been back for at least six months.
We worked with a realtor who recommended a loan officer based on our needs. The loan officer advised us that FHA might not be the best option, and there are other conventional options for first-time buyers that could work better.
@Aza
Be cautious about taking a realtor’s advice on mortgage choices. Realtors can suggest loan officers, but they often have biases against FHA loans without a full understanding. Talk to a loan officer who can help you compare both FHA and conventional options.
@Uma
Actually, the loan officer said that, not the realtor! We made sure to go over everything financially with the loan officer before discussing it with the realtor (who’s also a family friend). The officer explained why FHA wasn’t ideal for us, so I was just suggesting OP explore all options, not be set on FHA.
@Aza
Fair enough! FHA can be beneficial for some, but everyone’s situation is unique. It’s always worth discussing all options to see what works best.
Uma said:
@Aza
Fair enough! FHA can be beneficial for some, but everyone’s situation is unique. It’s always worth discussing all options to see what works best.
We weren’t fully ready to buy, but with rent prices, we realized a mortgage would be less than our rent. I assumed FHA was the go-to for first-time buyers, but we ended up going conventional with a community program and grant that covered some costs. FHA wasn’t right for us now because we have good credit and low debt-to-income, but it could still be great for others.