FHA-Tips & Tricks

Yes, it's possible. If your old business didn't show much income on your tax returns, your new W-2 salary may be what you qualify on.

How it works: Your years of self-employment still count as work history, especially if the new job is in the same field. You'll need recent pay stubs, and if the business has closed, proof that it's closed.

Yes, you may be able to close before your first day. A new job that starts within 60 days of closing can count.

How it works: You'll need a written, signed offer letter showing your pay and start date. You'll also need enough savings to cover your bills until your first paycheck arrives.

Yes, life happens! If you were out of work for six months or more, six months back at your current job may be enough.

How it works: We'll show at least six months in your current line of work, plus about two years of work history from before the break.

Yes, you don't have to put your plans on hold. Your regular income may still be used.

How it works: If you return before your first mortgage payment is due, your normal pay can count. If you return later, your savings can help fill the gap until then. You'll need a letter from your employer confirming you can come back and the date you plan to return.

Yes, one year may be enough. Overtime, bonus or tip income can count if you've earned it steadily for at least a year and it's likely to continue.

How it works: We average what you've earned, and your employer confirms the extra pay is ongoing.

Yes, you may not need to wait two years. Commission income can count after one year in the same or a similar line of work.

How it works: We average your commissions and verify them with pay stubs, W-2s or your employer.

Yes, your experience counts. With one to two years in business, you may qualify if you worked at least two years in the same or a related field before that.

How it works: You'll provide your tax returns and proof of your earlier job in that field.

Yes, and you may need less paperwork. If your personal tax returns show income rising over the last two years, you may not need your business tax returns.

How it works: Your closing funds can't come from business accounts, and the loan has to be a purchase, not a cash-out refinance.

Yes, congratulations! If you're salaried, we use your current salary. If you're hourly with hours that vary, we may be able to average the last 12 months at your new pay rate instead of two years at the old one.

How it works: Your pay stubs or employer verification show the new rate.

Yes, it can be simple. If you've been with your current employer for two years and qualify on base pay, we may not need to verify past jobs separately.

How it works: Your employer confirms your hire date, or your pay stub shows it, and you sign an IRS form that lets us check your tax records.

Yes, and it may count for more than you think. Income that isn't taxed can be "grossed up," usually by at least 15%, which raises the income we qualify you on.

How it works: Your award letter or court order plus bank statements showing the deposits are usually all you need.

Yes. If your award letter has no end date, the income is treated as ongoing. A future benefit review doesn't count against you, and you'll never be asked about your medical condition.

How it works: You'll need your award letter plus a bank statement or tax return showing the payments.

Yes, it can count as income. With a court order, three months of steady payments may be enough. With a voluntary agreement, six months.

How it works: We need your divorce decree or court order and bank statements showing the deposits. The support should continue for at least three more years.

Yes, many types of income can count. Car allowances, foster care payments, Section 8 homeownership vouchers, military allowances, pensions, trust income and more may all help.

How it works: Each one has its own simple documents, usually a letter from the source and proof you're receiving it. A car allowance or foster care payments generally need a two-year history.

Yes, that rent may help you qualify. Boarder income can count when you've received it for the past year and it's continuing.

How it works: We need proof of at least 9 of the last 12 months of payments, a written agreement, and proof your roommate lives at your address. It can make up to 30% of your qualifying income.

Yes, let the home help pay for itself! Rent from an accessory dwelling unit (ADU), like a garage apartment or in-law suite, may count toward qualifying.

How it works: The appraiser estimates market rent, and up to 75% of it can be used, up to 30% of your qualifying income. You'll need two months of payments in savings after closing.

Yes, when you're relocating. If you're moving more than 100 miles away, rent from your current home may offset its payment.

How it works: You'll need at least 25% equity, a lease of at least one year, and proof the tenant paid the deposit or first month's rent. Moving locally? Call us and we'll find the best path.

Yes, it may not count against you. Loans that will be paid off within 10 months can be left out, as long as those payments total 5% or less of your monthly income.

How it works: It has to reach the 10-month mark on its own. Paying the balance down early to get there doesn't count.

Yes, it may not count as your debt. If the main cardholder has made the payments for the past 12 months, it can be left out of your debt.

How it works: We just need statements showing the cardholder made those payments.

Yes, helping family shouldn't stop you. If the other person has paid on time for the last 12 months, the payment may be left out.

How it works: They provide 12 months of bank statements or canceled checks showing their payments.

Yes, a fresh start is possible. If your divorce decree assigns the debt to your ex, it may be left out of your debt.

How it works: A copy of the divorce decree or court order is all we need. No payment history is required.

Yes, if your business pays it. The debt may be left out when your business makes the payments.

How it works: We show the payments come from business accounts and the expense appears on your business tax returns.

Yes, absolutely! We can use your actual monthly payment, including an income-driven plan, as long as it's more than $0.

How it works: If your credit report shows a higher payment, a letter or statement from your loan servicer showing the real one is enough. If your payment is $0, we use 0.5% of the balance. Loans that have been forgiven or discharged don't count at all.

Yes, we may be able to use your real payment. If your loan statement shows a lower payment than your credit report, that lower amount may be used.

How it works: Send your latest statement or loan agreement.

Yes. Charged-off accounts don't count as a monthly debt.

How it works: The approval system reviews your credit as a whole. Many buyers with past credit problems still get approved.

Yes, you may not need to pay them off first. If your non-medical collections add up to less than $2,000, they generally don't have to be paid or counted.

How it works: We review your credit report together and plan the next steps.

Yes, you have options. With collections of $2,000 or more, you can pay them off, set up a payment plan, or count 5% of the balance as a monthly payment.

How it works: We choose whichever of those options works best for your numbers.

Yes. Medical collections are not counted as debt, and disputed medical accounts don't hold you back either.

How it works: No payoff is required to qualify.

Yes, and it works in your favor. Cards that must be paid in full each month (30-day accounts) may not count, as long as you've paid them in full for the past 12 months.

How it works: Your credit report shows the history. You just need enough savings to cover the balance.

Yes. Loans secured by your own savings or retirement account don't add a monthly payment to your debt.

How it works: We simply subtract the loan from the account balance.

Yes. Child care, commuting, utilities, union dues, non-property insurance and 401(k) contributions are not counted as debt.

How it works: Only actual debts like loans and credit cards count toward your ratio.

Yes, you may still qualify. Being in a forbearance plan and following it doesn't count as being late.

How it works: The forbearance has to end by closing. If it has already ended, you need three on-time payments after it ended.

Yes, you may still qualify! FHA allows scores as low as 500. With a 580 or higher, you're eligible for the lowest down payment.

How it works: With a score between 500 and 579, you'll need a somewhat larger down payment. We can also show you simple ways to raise your score.

Yes! No credit doesn't mean no home. Your on-time rent, utility, phone and insurance payments can build your credit history for the loan.

How it works: We put together 12 months of payment records, such as canceled checks or bank statements, or order a special credit report.

Yes, that history works for you. With a 620+ score and 12 months of on-time rent of $300 or more, your rent history can strengthen your approval.

How it works: Your lease plus bank statements, canceled checks or a landlord verification.

Yes, it may not hold you back. Disputed medical accounts, identity theft accounts (with a police report), and disputes on accounts that aren't negative are generally not a problem.

How it works: We review your report and handle it the right way.

Yes, a payment plan may be enough. You don't have to pay the judgment in full if you have a written payment agreement and have made three on-time payments.

How it works: Payments can't be made early to hit three faster. Any lien on the home has to be placed behind the new mortgage.

Yes, a payment plan may be enough. With an IRS installment agreement and three on-time payments, you may qualify.

How it works: Send us your IRS agreement and proof of payments. The payment is included in your monthly debts.

Yes, once it's resolved. A delinquent federal debt, such as a defaulted government loan, has to be resolved with the agency first. Once that's done, you can move forward.

How it works: We help you find out what's owed and who to contact. A clear report from the government database lenders check, called CAIVRS, is the goal.

Yes. Being in a credit counseling or debt management program doesn't count against you.

How it works: No letter or explanation is required when you're approved through the automated system.

Yes, you don't have to wait until it's over. After 12 months of on-time plan payments, you may qualify.

How it works: You'll need written permission from the bankruptcy court or trustee to take on the new mortgage.

Yes, a new chapter starts here. The usual wait is two years after discharge. If the bankruptcy was caused by circumstances beyond your control, it can be as little as one year.

How it works: Show you've rebuilt good credit or avoided new debt. For the shorter wait, document the hardship, such as a job loss or serious illness.

Yes, maybe right away. If your mortgage and other loan payments were on time for the 12 months before the short sale, the three-year wait may not apply.

How it works: We review your payment history from before the sale. A documented hardship can also shorten the wait.

Yes, homeownership can be in your future again. The usual wait is three years, but you may qualify sooner if the foreclosure came from a hardship beyond your control, such as a serious illness or the death of a wage earner.

How it works: Document the hardship and show you've rebuilt good credit since. Divorce alone isn't a hardship, but if the loan was current when your ex kept the house and it was foreclosed later, that may qualify.

Yes, there's often a way. With a 580+ score, your ratios can go higher with compensating factors.

How it works: Strengths like three months of savings after closing, a new payment close to your current rent, or strong leftover income each month can support higher ratios, up to 40/50 with two of them.

Yes, you may qualify for more. Energy-efficient homes can get higher qualifying ratios (33/45).

How it works: New homes built to current energy code, or existing homes scoring 6 or higher on the Home Energy Score (or improved to that before closing), qualify.

Yes, family can help! A family member, such as a parent, can join the loan as a co-borrower without living in the home, and you can still get the lowest down payment.

How it works: Their income and debts are combined with yours. This applies to single-family homes. They need to be a U.S. citizen or live in the U.S.

Yes, and you may still get the lowest down payment. Buying a relative's main home qualifies, and so does buying the home you've rented for at least six months.

How it works: If you're renting, a lease or other proof that you've lived there is required. Family can also give you equity toward your down payment.

Yes, thank you for your service! You can still buy as an owner-occupant if a family member lives in the home or you plan to live there after discharge.

How it works: You'll provide your military orders showing your duty station is more than 100 miles away.

Yes, a gift can cover it! Your down payment can be a gift from family, your employer, your union, a close friend, a charity or a government program.

How it works: The giver signs a gift letter saying it doesn't need to be repaid, and we document the transfer of the money.

Yes, that works too. A family member can lend you the down payment as a second mortgage.

How it works: The loan needs regular monthly payments (if any), no balloon payment for 10 years, and no prepayment penalty. The payment is included when you qualify.

Yes, help is out there! State and local government programs and approved nonprofits can help with your down payment and closing costs.

How it works: We'll help you find programs you may qualify for and pair them with your FHA loan.

Yes, the seller can pay them. Sellers and other parties to the sale can contribute up to 6% of the price toward closing costs, prepaid items and even a rate buydown.

How it works: The credit is written into your purchase contract. Lender credits can help as well.

Yes, in many cases. Where property taxes are paid after the year ends, as in Florida, the seller's tax credit at closing can go toward your down payment.

How it works: You'll need to show you had enough funds and paid your closing costs without the credit.

Yes, your retirement savings can help. Up to 60% of your vested balance can count toward your down payment, closing costs or savings requirement.

How it works: You'll need your latest statement, and proof of the withdrawal or loan if you use the funds to close.

Yes, once it's deposited and explained. Cash you've saved can be used.

How it works: Deposit it in a bank or with the title company, and give a short explanation of how and how long you saved it. It should make sense for your income.