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Can you get a mortgage if you work through a staffing agency?

Jim Quist Nov 30, 2022 3:13:24 PM
Mortgage staffing agency

If you work for a staffing agency, you might need help buying a house. Most banks won't use your staffing agency income to approve your mortgage. And, unfortunately, without a loan, you can't buy a home.

A recent homebuyer in this predicament told us, "The bank denied my mortgage application. Their loan officer said the bank wouldn't accept the income because I work through a staffing agency." She asked, "Is it true that banks won't allow me to use my income from an employment agency to qualify for a home loan? Or should I apply with a different lender?" 

She worried about losing the house she was under contract for and was scheduled to buy soon. Check out our Sales Contract Explainer to learn more about your contract.

Are you feeling uneasy about a similar situation? Don't give up hope. Depending on the details, you can get approved for a loan to buy a home.

Nevertheless, no universal rule states that income from a staffing agency is ineligible. In other words, you can still get a home loan while working for a staffing or employment agency.

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What is a stable and predictable income for a mortgage?

Before any lender approves your mortgage application, the lender's underwriter, the person making the loan decision, must confirm you can afford the mortgage. The underwriter verifies that you earn enough money to repay the loan by checking your income documents, like your pay stubs, W-2 statements, and tax returns. 

They must also determine that your income is stable and likely to continue for the foreseeable future. For lenders, the foreseeable future is the next three years. 

Often, a loan decision like this would be the underwriter's judgment call. However, banks don't want their underwriters to make loan decisions based on opinions or feelings. So they create internal policies to maintain consistency. For example, most banks will tell you they don't offer loans to people using income from staffing agencies. 

Generally, you won't get approved by a mortgage lender if you're a temporary worker on a short-term contract without an option for renewal.

However, if you use the right lender for your mortgage, you can get approved for a long-term staffing job with a contract that renews. Contract-to-hire jobs and long-term specialized positions are good examples. 

Last month we approved a home loan for an airline mechanic. He has worked for three different staffing agencies for the past two years. Nevertheless, we documented that his income was stable, predictable, and likely to continue for the foreseeable future.

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Do any mortgage lenders allow for staffing agency income?

When you're income comes from a staffing agency, consider applying for your mortgage through a smaller lender. Unlike a big bank, a small lender will evaluate your unique situation, gather information, and make a reasonable decision. 

If you're buying a home in Florida, Illinois, Indiana, Michigan, or Tennessee and have questions about your mortgage, click the button below and talk to one of our home loan experts. 

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Jim Quist NewCastle Home Loans
President and Founder of NewCastle Home Loans. Jim has been in the mortgage business for 20+ years.

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