My wife and I (in our 20's) are looking to purchase a home in September after our lease is up, but won't quite have enough for 20% down by then (most likely 10-15%. I've currently switched from W2 income (2.5 years consistent) and will only be at 9 months of recorded 1099 income by September. I know that lenders generally look for 1-2 years of tax returns for that, but I won't have made it to that point by then.

TL;DR: Just switched from W2 to 1099 income and want to buy a house in 9 months.

My question is what are my options for purchasing a house (90-130k) with my situation? Can I use my W2 income history? Are there better loan options than an FHA for my situation?

Other info that may be helpful:

  • My wife and I have 0 debt as of August 2019
  • This is our first house purchase
  • She has excellent credit, I have good
  • The move is cross-country
  • My current job, while contract, has fairly stable pay and hours
  • The job is the same type of job as before

1 Answer 1


FHA loans effectively require two years of employment history. There is no strict requirement on what makes up that history. Generally, the lender will have to prove to the underwriter that you are qualified for your current job (versus having landed it as some sort of fluke) and that you are likely to remain employed in the future. The lender will want two years of tax returns (regardless of your source of income) at a minimum. In cases where either of these are in doubt simply by looking at your tax returns (which really show income history, more than employment history) you may be asked to supply additional material, including proof of any education or training or other qualifications you have to hold your current job.

People switch jobs all the time, and people switch between direct and contract work all the time. The simple fact that you've made this change doesn't explicitly disqualify you, but you should talk to your lender about the specific documentation they will want as part of your application.

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