November 22, 2010
The FHA loan application process includes many steps, including running a credit report and having the FHA borrower fill out paperwork with personal information like open lines of credit and current income. Applying for a government home loan also requires giving the lender two types of personal history–a record of where the borrower has lived and where the borrower has worked.
FHA requirements dictate furnishing at least a two-year work history, but that requirement shouldn’t be mistaken for an employment minimum. According to the FHA’s official site, “FHA does not impose a minimum length of time a borrower must have held a position of employment to be eligible for a mortgage.”
What does a buyer do if they can’t show at least a two-year work history? Some FHA home loan applicants who recently graduated from college or have separated from the military may wonder if they have reduced chances of getting an FHA loan approved because they can’t show a history of traditional employment.
In the case of military members, especially Guard and Reserve members who may have joined and been called to active duty right away because of wartime operations, the military service itself is viewed as employment.
There’s no liability or negative consequences as a result of military service, especially where a government home loan application is concerned. The FHA requests a copy of discharge paperwork or related documents to establish a military work history.
For students, part-time work and internships may be interpreted as employment under the right circumstances, but regardless all the FHA requires is supporting documentation of college attendance. College transcripts are usually sufficient. There is one caveat–according to the FHA official site, “…You must prove steady income for at least three years, and demonstrate that you’ve consistently paid your bills on time.”
Steady income for college students may be more difficult to demonstrate, but those on work-study programs, lengthy internships or other programs may find it easier to get FHA approval for a home loan than those who studied full-time but did not work. In the end, it’s up to the lender and the FHA to determine what college experience is worth on the FHA loan application.
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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