When VA lenders evaluate a VA home loan application, one of the primary factors is the ability to repay the monthly obligations. That means a steady job or steady income and the expectation that the income will continue. The benchmark for determining the possibility of continuance is two years of previous employment and an expectation of at least three more years. Sometimes however there are “blips” that need to be taken into consideration.
The first blip is reserved for someone who has just graduated from college or trade school. When someone first gets out of school, does the two year employment requirement apply? Not necessarily. By providing a transcript and a diploma and obtaining a job related to the degree, a VA lender may count the income from the new job as long after 30 days of employment. VA loans are no different than conventional mortgages in this regard.
Another time when the two year employment requirement isn’t needed is when there is a family leave granted or time off due to an illness or injury. Lenders will question a gap in employment and in most instances but documenting a legitimate leave of absence should calm a lender’s concerns.
One blip that can’t be fixed? Becoming newly self-employed. VA loans require that the veteran have at least two years of self-employment verified by two years federal income tax returns.
Not all employment blips are alike and if you think there might be a question with your job history, speak with an experienced VA loan officer and relate your scenario. It’s better to get your questions answered ahead of time instead of later.