A minimum history of two years of employment income is recommended. However, income that has been received for a shorter period of time may be considered as acceptable income, as long as the borrower’s employment profile demonstrates that there are positive factors to reasonably offset the shorter income history.
Borrowers relying on overtime or bonus income for qualifying purposes must have a history of no less than 12 months to be considered stable.
Obtain the following documents:
- a completed Form 1005 or Form 1005(S), or
- the borrower’s recent paystub and IRS W-2 forms covering the most recent two-year period.
See B3-3.1-01, General Income Information, for additional information on calculating variable income (applies to hourly paid employees with fluctuating hours and bonus and overtime).
If the borrower has recently changed positions with his or her employer, determine the effect of the change on the borrower’s eligibility and opportunity to receive bonus or overtime pay in the future.
See B3-3.1-02, Standards for Employment Documentation, for additional information.