October 26, 2021

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FHA Loan Rules: Commuting Distance

2015-33A reader asks, “We are trying to get a loan and the lender is claiming that the requirements say she cant commute for two hours one way to work..My wife is the qualifying buyer and I have never heard of such a thing.. Is this discrimination cause she is a woman? They want verification from transfer store that wife will get same pay when transferred too. This would cause grief at current employment because they wouldnt want to see her go. We dont want to do anything like that, transfer, until loan is finalized.. this all came up the day we were supposed to close…seems like discrimination, time to call a lawyer?”

Let’s work backwards on this reader question from the last issue to the first; FHA loan rules in HUD 4000.1 do require the lender to verify that employment and income are stable, reliable, and likely to continue.

This is an FHA requirement applied to all applicants regardless of gender or other non-financial factors. If the borrower is applying for an FHA-guaranteed loan, this would be a requirement for loan approval. The loan officer‘s need to verify that income will remain the same in spite of the transfer is, based on a reading of FHA loan rules for income verification, a reasonable one.

The commuting distance issue is a bit more situational. Lender standards would apply in such cases, so it’s important to establish what the lender’s standard would be (something we cannot do here, since all lenders are different).

FHA loan rules address “reasonable commuting distances” in HUD 4000.1, but in the context of whether or not it’s possible to get an FHA mortgage for a “second home” due to hardship created by certain situations including commutes.

Since individual lender standards apply, the borrower would need to work this commuting distance issue out with the lender. We don’t know if the reader already has an existing FHA mortgage and is looking to apply for another one, or what other factors may affect the transaction, but the “discrimination” issue as brought up in the reader question doesn’t seem to be an issue based on the information provided.

The income and commuting distance issues can be common problems, but in this particular case the best advice is to discuss them directly with the lender as lender standards, state law, and other guidelines may apply above and beyond the FHA loan rules found in HUD 4000.1.

Joe Wallace - Staff Writer

By Joe Wallace

October 31, 2016

Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.

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