June 15, 2026
FHA loan rules require the lender to verify employment and income. The lender must determine that a borrower’s income is stable, documented, and reasonably likely to continue. But what kinds of employment income can be used to qualify for an FHA mortgage?
A reader once asked about a young borrower who held two receptionist jobs. One position had lasted more than two years at approximately 15 hours per week, while the second had lasted a little more than one year at approximately 20 hours per week. Could both incomes be used as qualifying income?
The answer depends on how each job is classified and whether the income meets FHA requirements. Primary employment is the borrower’s principal job and is generally full-time, salaried or hourly. Part-time employment generally refers to work that is not the borrower’s primary employment and is usually performed for fewer than 40 hours per week.
Income from a part-time job may be used as effective income when the borrower has worked the part-time job without interruption for the past two years and the current position is reasonably likely to continue. The lender must verify the employment history, earnings, and likelihood the income will continue.
In the reader’s example, the job held for more than two years may meet the basic history requirement if it has been uninterrupted and is likely to continue. The newer job, with only about 16 months of history, would not automatically satisfy the standard two-year part-time employment requirement. The lender cannot simply count both incomes because the borrower currently works both jobs.
How the income is calculated also matters. For a salaried employee whose income has been and is likely to be earned consistently, the lender generally uses the current salary. For an hourly employee whose hours do not vary, the current hourly rate and regular hours may be used.
When an hourly employee’s hours vary, the lender generally averages the income over the previous two years. If the lender documents an increase in the hourly pay rate, it may calculate income using the most recent 12-month average of hours at the current pay rate. A declining income pattern may require additional analysis and could result in a lower qualifying amount.
Overtime and bonus income may also be included when it has been received for the past two years and is likely to continue. Income earned for less than two years may still be considered when it has been earned for at least 12 months and the lender documents that it was consistently earned and is reasonably likely to continue. The lender generally averages this income and considers any decline.
The original discussion of projected income also needs clarification. A hoped-for raise or promotion generally cannot be used merely because the borrower expects it. However, documented expected income from a new job may be eligible when the employment is scheduled to begin within the permitted FHA timeframe and the borrower meets the applicable documentation and cash-reserve requirements. The lender must document the job and income before using it to qualify.
FHA sets the minimum underwriting standards, but an FHA-approved lender may apply additional requirements. Borrowers with multiple jobs, changing schedules, recent raises, or less than two years in a part-time position should ask how each income source will be documented and calculated.
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Bruce Reichstein has spent over three decades as an experienced FHA and VA home loan mortgage banker and underwriter where he was responsible for funding “Billions” in government backed mortgage loans. He is the Managing Editor for FHANewsblog.com where he educates homeowners on the specific guidelines for obtaining FHA guaranteed home loans.
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