Future Job, You Can Close Now!

If the new job will occur after the home closing:

Fannie Mae

  • Purchase transactions of 1-unit primary residence.

  • The employment offer or contract must be fully executed by borrower and employer; provide the terms of employment including position, type, rate of pay, start date, and with no contingencies.

  • Qualified using only fixed base income.

  • Cannot be employed by a family member or party to the transaction.

  • Start date must be no earlier than 30 days prior to Note date or no later than 90 days after the Note date.

  • If employment starts prior to closing, a verbal verification of employment that confirms active employment status is required.

  • Reserves are required, one of the following must be met:

    • Financial reserves sufficient to cover principal, interest, taxes, insurance and association dues (PITIA) for the subject property for 6-months; or

    • Financial reserves or current income sufficient to cover the monthly liabilities included in the debt-to-income ratio, including the PITIA for the subject property, for the number of months between the note date and the employment start date, plus one.

      Current income may be used in lieu of or in addition to financial reserves. For this purpose you may use the amount of income the borrower is expected to receive between the note date and the employment start date. If the current income is not being used for qualifying purposes, it can be documented using income documentation, such as a paystub, and no verification of employment is required. For calculation purposes, consider any portion of a month as a full month.

Freddie Mac

For Borrowers starting new employment or receiving a future salary increase from their current employer, income commencing after the Note Date may be considered a stable source of qualifying income, provided that all of the following requirements are met:

  • Employment and income must meet the following requirements:

  • Income must be from new primary employment or a future salary increase with the current primary employer.

  • Income must be non-fluctuating and salaried (e.g., hourly earnings are not permitted), and

  • The Borrower’s employer must not be a family member or interested party to the real estate or Mortgage transaction.

  • Start date of the new employment or future salary increase, as applicable:

    • Must be no later than 90 days after the Note Date

  • The Mortgage must be originated for one of the following purposes:

    • Purchase transaction

    • No cash-out refinance

  • The mortgaged premises must be a 1-unit Primary Residence

  • Verification of additional funds:

    • In addition to funds required to be paid by the Borrower and Borrower reserves, the Seller must verify additional funds in the Borrower's depository and/or securities account(s) that equal or exceed the amount of the monthly housing expense and other monthly liabilities due between the Note Date and the start date of the new employment/future salary increase, plus one additional month. A partial month is counted as one month for the purpose of this calculation.

    • The amount of the required additional funds may be reduced by the amount of verified gross income that any Borrower on the Mortgage is expected to earn during the period described above, whether or not this income is used to qualify for the Mortgage or is expected to continue after the start date of the new employment/future salary increase.

  • The following documentation is required:

    • Copy of the employment offer letter, employment contract or other evidence of the future salary increase from the current employer that:

      • Is fully executed and accepted by the Borrower

      • Is non-contingent or provide documentation, such as a letter or e-mails from the employer verifying all contingencies have been cleared, and

      • Includes the terms of employment, including employment start date and annual income based on non-fluctuating earnings

FHA

Future income must be documented with:

  • A formal offer/contract from the new employer stating all pertinent information (e.g., start date, salary).

  • The offer must be non-contingent.

  • It must be signed by the employer and accepted by the borrower.

  • Borrower must start new job within 60 days of closing.

  • Must have reserves equal to three months’ PITIA of new loan and all other monthly debts.

  • A Verbal VOE within 10 days prior to closing verifying terms of contract have not changed will be required.

Expected income refers to income from cost-of-living adjustments, performance raises, a new job or retirement that has not been, but will be received within 60 days of mortgage closing.

  • Expected income may be considered as effective income except when derived from a family-owned business.

  • Expected income must be documented and verified in writing from the employer, the amount and that it is guaranteed to begin within 60 days of the mortgage closing.

  • Expected Retirement income must also be verified and that it is guaranteed to begin within 60 days of the mortgage closing.

  • Verification is required that the borrower will have sufficient income or cash reserves to support the mortgage payment and any other obligations between mortgage closing and the beginning of the receipt of the income.

  • Reserves equal to three months’ PITIA of new loan and all other monthly debts.

  • Loan must meet manual underwriting guidelines

VA

Future income must be documented with a formal offer/contract from the new employer and it must be non-contingent.

  • The formal offer/contract must be signed by the employer and accepted by the borrower.

  • Borrower must start new job within 60 days of closing.

  • Must have reserves equal to three months’ PITIA of new loan and all other monthly debts

  • A verbal VOE within 10 days of closing verifying terms have not changed is required.

  • New job should be related to the borrowers past employment experience.

  • Loan must meet manual underwriting guidelines