"My mortgage loan officer is telling me I can't get a loan regardless of my full-time employment at a major shipping company and solid income, because, technically, I'm employed by a staffing agency. They keep going on about a three year “continuity of income”... what does that mean? Is this loan officer correct? Does any of this sound odd? Do you have any suggestions for any options I might have?"
The loan officer you are talking to is completely misinformed. Don't let their advice hold you back.
You CAN qualify for a mortgage if you are employed through a staffing agency or temp agency. The answer to these questions are in the depths of federal mortgage associations and agency guidelines. Here is what Fannie Mae says:
Stable and Predictable Income
Fannie Mae’s underwriting guidelines emphasize the continuity of a borrower’s stable income. The stable and reliable flow of income is a key consideration in mortgage loan underwriting. Individuals who change jobs frequently, but who are nevertheless able to earn consistent and predictable income, are also considered to have a reliable flow of income for qualifying purposes.
Continuity of Income
A key driver of successful home ownership is confidence all income used in qualifying the borrower will continue to be received by the borrower for the foreseeable future. Unless the lender has knowledge to the contrary, if the income does not have a defined expiration date and the applicable history of receipt of the income is documented (per the specific income type), the lender may conclude the income is stable, predictable, and likely to continue. The lender is not expected to request additional documentation from the borrower.
If the income source does have a defined expiration date or is dependent on the depletion of an asset account or other limited benefit, the lender must document the likelihood of continued receipt of the income for at least three years.
If the lender is notified the borrower is transitioning to a lower pay structure (for example: due to pending retirement), the lender must use the lower amount to qualify the borrower.
The following table contains examples of income types with and without defined expiration dates. This information is provided to assist lenders in determining whether additional income documentation may be necessary to support a three-year continuance. Note that lenders remain responsible for making the final determination of whether the borrower’s specific income source has a defined expiration date.
As you can see, Fannie Mae makes it very clear that as long as your income has been stable and consistent, even if you’ve changed jobs frequently or work for a staffing agency, the income can be used to qualify for a mortgage.
As for the “Continuity of Income” requirements - they DO NOT apply to base salary income, so there is no need to worry about having to prove that your temp assignment won’t end in the next three years time.
Now, you have two options:
- You can find a new loan officer (one that understands what the actual guidelines say regarding your situation). We can do that for you - give me a call at 773-770-4713 or email firstname.lastname@example.org. Or...
- You can be generous and help your current loan officer find their way to getting your loan approved with a little help from us and Fannie Mae.
You will need to document a one to two-year history of employment with a consistent level of income, so be sure you have your tax returns, W2s, and current pay stubs on hand when you decide how to proceed. You can always reach out to us or use the chat at the bottom right of the page if you have more questions.
In addition, if you're still early in your home buying journey, make sure to download our free First-time Home Buyer Guide! You'll learn the entire mortgage approval and home purchase process step-by-step in plain English.