How long do you have to be on the same job for USDA loan approval?
How long do you have to be on the same job to qualify for a USDA loan?
As you can imagine, guidelines regarding employment history are critical when trying to qualify for a USDA loan.
Additionally, we also find that there is quite a bit of misunderstanding of what is actually required for USDA employment history and in today’s video tip we will cover the details of how long you have to be on the same job to qualify for a USDA loan.
However, before we get started please take advantage of our free second opinion service “SOS” which is designed to help Realtors and Buyers get access to an expert second opinion and is great for both new pre-qualifications and loans that are currently in progress.
So, do you really have to be on the same job for 2 years in order to qualify for a USDA loan?
While it is ideal that a potential applicant has an established history of working for one employer, it is NOT a requirement. USDA guidelines state the following regarding employment:
“There is no minimum length of time an applicant must have held a position to consider employment income as dependable.”
However, the lender must verify the applicant’s employment for the most recent two full years and verify that the applicant’s income has been stable.
If an applicant indicates he or she was in school or in the military during any of this time, the applicant must provide evidence supporting this such as college transcripts or discharge papers.
If the applicant has recently re-entered the workforce after an absence to care for a family member or minor child, extended medical illness, or other circumstance reasonable to the lender, the applicant must provide evidence.
The applicant should not have any gaps in employment of more than a month within the two year period prior to making the loan application.
It remains the USDA Approved Lender’s responsibility to analyze the gaps in employment as it relates to the probability of continued income.
Applicants that have not been employed for 12 months with their current employer or have experienced a significant earnings increase are considered high risk.
USDA Approved Lenders must ensure the applicant will have the required stable and dependable income to carry the mortgage debt.
It is important to point out, that while you do not have to be on the same job for 2 years in order to qualify for a USDA, approved lenders must still determine stable and dependable monthly income from verified sources.
Please remember that job stability provides strength with your qualifying and having long time employment at the same job can also be a very strong compensating factor towards both underwriting and USDA Rural Development approval.