Employment History Required for a Kentucky Mortgage Loan Approval
Kentucky Conventional Mortgage
Two year is standard but shorter employment histories may be permitted for applicants with stable jobs and incomes or other positive factors
Explainable employment gaps of six months or more are also permitted as long as the applicant has been back to work for at least six months and has a two year employment history prior to the work gap
Self-employed borrowers are typically required to demonstrate a two year job history
A self-employed job history of between one and two years is permitted if the applicant was previously employed in a similar field and earns a similar or greater income as evidenced by the borrower's tax returns
Self-employed applicants are also required to provide business tax returns for two years unless the business is at least five years old
A continuous two year history of part-time employment is typically required although part-time work history of one-to-two years may be permitted for stronger applicants
A two year history of seasonal work in the same job or line of work is required
Lenders are also required to verify with the applicant's employer that the applicant will be rehired for the next employment season
Borrowers with seasonal employment are permitted to use unemployment compensation as income as long as the compensation is due to regular, seasonal employment breaks
A two year employment history is recommended for bonus, commission or overtime income to be considered but guidelines permit an income history of one-to-two years for borrowers with strong employment, financial and credit profiles
Two year is standard but shorter employment histories may be permitted for applicants with stable jobs and incomes or other positive factors
Explainable employment gaps of six months or more are also permitted as long as the applicant has been back to work for at least six months and has a two year employment history prior to the work gap
Self-employed borrowers are typically required to demonstrate a two year job history
A self-employed job history of between one and two years is permitted if the applicant was previously employed in a similar field and earns a similar or greater income as evidenced by the borrower's tax returns
Self-employed applicants are also required to provide business tax returns for two years unless the business is at least five years old
A continuous two year history of part-time employment is typically required although part-time work history of one-to-two years may be permitted for stronger applicants
A two year history of seasonal work in the same job or line of work is required
Lenders are also required to verify with the applicant's employer that the applicant will be rehired for the next employment season
Borrowers with seasonal employment are permitted to use unemployment compensation as income as long as the compensation is due to regular, seasonal employment breaks
A two year employment history is recommended for bonus, commission or overtime income to be considered but guidelines permit an income history of one-to-two years for borrowers with strong employment, financial and credit profiles
Kentucky FHA Mortgage Program
The FHA Program does not technically have an minimum employment history requirement but lenders are required to verify applicants' employment history for the prior two years
Applicants are required to explain any employment gaps of at least one month
Explainable employment gaps of six months or more are also permitted
Self-employed borrowers are typically required to demonstrate a two year job history
A self-employed job history of between one and two years is permitted if the applicant was previously employed in a similar line of work for at least two years
A combination of one year of employment in a similar field plus one year of education or training in that field is also permitted for self-employed borrowers
An uninterrupted two year history of part-time employment is typically required although part-time work history of less than two years may be considered as long as the lender determines that the work is likely to continue
Income from seasonal employment is also permitted as long as the applicant has a two year work history and expects to be rehired for future seasons
A two year employment history is required for bonus, commission or overtime income to be considered
An employment history of less than two years is allowed if the lender justifies and documents the reason for including the income
Lenders are also required to explain any significant declines in bonus, commission or overtime income
Significant fluctuations in bonus, commission or overtime income may require the lender to use an average period of longer than two years to calculate the applicant's income
Kentucky USDA Mortgage Program
The USDA Home Loan Program does not technically have an minimum employment history requirement but lenders are required to verify applicants' employment history for the prior two years and confirm that the applicant's income is stable
Applicants are required to explain any employment gaps of at least one month
Explainable employment gaps of six months or more are also permitted as long as the applicant can document the reason for the gap, has been back to work for at least six months and has a two year employment history prior to the work gap
Self-employed borrowers are typically required to demonstrate a two year job history as documented by the applicant's tax returns
A self-employed job history of between one and two years is permitted if the applicant was previously employed in a similar line of work for at least two years or one year of work plus one year of formal education or training
The lender is required to confirm that the self-employment income is expected to continue for at least three years
A self-employed history of less than one year is not permitted
An uninterrupted two year history in the same position is typically required for part-time employment although a part-time work history of less than two years may be considered if the lender verifies with the employer that the work is likely to continue at the same compensation level
Income from seasonal employment is permitted as long as the applicant has a two year work history and expects to be rehired for future seasons
The lender is required to determine that part-time and seasonal income is expected to continue for the next three years
Income from part-time or seasonal work must be reported on the borrower's tax returns to be considered by a lender
A consecutive two year payment history and determination by the lender that the income is expected to continue for the next three years is required for bonus, commission or overtime income to be considered
Bonus, commission or overtime income earned for less than a year is not permitted without significant compensating factors such as a change in the applicant's compensation structure
Lenders are required to explain any significant declines in bonus, commission or overtime income
Significant variations in bonus, commission or overtime income may require the lender to use an average period of more than two years to calculate the applicant's income
Kentucky VA Mortgage Program
The VA Program requires lenders to verify an applicant's employment history for the prior two years although there is no minimum employment history guideline
Applicants with an employment history of less than a year may be considered if the lender determines and documents that the applicant has a high probability of continuing his or her job
The applicant's employment history is evaluated on a case-by-case basis
Active military personal who are within 12 months of their release date are required to reenlist or provide verification of a job offer after their release from the military
Self-employed borrowers are typically required to demonstrate a two year job history unless the applicant was previously employed in a similar line of work or received specialized training in that field
A self-employed history of less than one year is highly uncommon
A continuous and verified two year history of part-time employment is generally required
The applicant's income from part-time work should be steady and predictable and the lender is required to determine that the work will continue in the future
The lender is also required to confirm that applicants can handle the part-time job along with the demands of their primary job
A two year work history is required for bonus, commission and overtime income to be considered by the lender unless the borrower has extensive experience or training in their field of work
The lender must determine that the income is predictable and likely to continue in the future
Bonus, commission and overtime income with less than a two year work history is rarely permitted and requires extensive documentation by the lender
Joel Lobb (NMLS#57916)
Senior Loan Officer
Senior Loan Officer
American Mortgage Solutions, Inc.
10602 Timberwood Circle Suite 3
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