How Long Do I Have to Work Before Applying for a Home Loan?

When you apply for a home loan, you must have sufficient income to cover the monthly payment. However, even if your income is high enough to meet the lender's requirements, most lenders still require you to show that you have been employed for a minimum amount of time prior to your application.

Conventional Loans

Fannie Mae determines the guidelines for conventional loans. According to Fannie Mae, borrowers must show a history of at least two years of stable employment. In this case, "stable employment" is defined as employment that produces a predictable income and is likely to continue for at least three years. As long as the income remains the same, it doesn't matter how many employers the borrower has worked for over the two-year period in question. Borrowers with less than 24 months of work history may still qualify for the loan if the lender believes the borrower to be an acceptable risk.

FHA Loans

The Federal Housing Administration doesn't require borrowers to meet a minimum employment requirement. However, lenders will examine each borrower's employment history for the two years prior to the loan application to determine whether the borrower earns a stable and predictable income. If the borrower shows any gaps in employment that last more than one month, he must explain them.

VA Loans

The Veterans Administration doesn't publish a specific length of employment that borrowers must prove. In fact, the VA sometimes approves loans for borrowers who are not yet working but can show evidence of future employment. However, the VA approves such loans on a case-by-case basis.

Self-Employment

If you are self-employed, the length of employment history you must show depends on the type of loan you are requesting. If you are applying for a conventional or FHA loan, you must typically show at least two years of stable self-employment. To determine your monthly income, the lender will divide your total net income for the last two years by 24. On the other hand, if you are applying for a VA loan, the lender will evaluate your case individually.