While looking up FHA loan requirements, I found the following line interesting:

Must have a steady employment history or worked for the same employer for the past two years.

From: http://www.zillow.com/mortgage-learning/fha-loan/#requirements

I've been a tech contractor for most of my career, which means while I've never been unemployed for more than a couple months at most, I've also never stayed in a single position for more than a year, and usually it's closer to six months.

What constitutes "steady employment history?"

  • 2
    Generally a minimum of 2 years – Steven Ackley Dec 11 '15 at 14:52
  • @stevenackley Does that mean I probably wouldn't qualify since I jump around a lot? – Soviero Dec 11 '15 at 14:54
  • Not necessarily, it's up to the underwriter. If you have decent credit and reasonable income, you shouldn't have a huge issue. You'd probably be better off with a conventional mortgage IMO – Steven Ackley Dec 11 '15 at 15:01
  • 1
    You don't need 20% down. You can do as low as 5% and pick up the PMI – Steven Ackley Dec 11 '15 at 15:06

In the FHA process, there are a few things you will be asked for:

  • Pay stubs
  • W2 statements
  • Bank statements
  • Tax returns

As a W2 contractor, assuming you categorize this under the guidelines for seasonal employment, here are the criteria:

Has worked the same line of work for the past two years; and

Is reasonably likely to be rehired for the next season.

For employees with Seasonal Employment income, the Mortgagee must average the income earned over the previous two full years to calculate Effective Income.

As opposed to self-employment:

A Mortgagee may consider income as stable after a 20 percent reduction if the Mortgagee can:

Document the reduction in income was the result of an extenuating circumstance;

The Borrower can demonstrate the income has been stable or increasing for a minimum of 12 months; and

The Borrower qualifies utilizing the reduced income.

In general,

Effective Income must:

Be likely to continue through at least the first three years of the mortgage;

Be documentable;

Be legally derived; and

Be reported to the IRS when required


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