FHA employment income: salary is easy—the variable pieces are where files are won or lost.
Hourly changes, overtime, bonuses, commissions, second jobs and employment gaps require trend analysis. FHA underwriting is about sustainable qualifying income, not simply the largest number on the latest paystub.
Salary and hourly income
Current salary or hourly earnings can be used when employment and income are properly verified. Variable hours require analysis of the historical earnings pattern rather than blindly multiplying the current hourly rate by 40 hours.
Overtime and bonus
FHA generally wants a history sufficient to establish that overtime or bonus income is likely to continue. A two-year history is commonly used, but income earned for at least one year can be considered when the underwriter can justify likely continuance. The trend matters: declining variable income requires careful analysis and may not support a simple two-year average.
Commission income
Commission income is analyzed for history, stability and continuance. Tax-return documentation can become relevant when commission income requires analysis of unreimbursed business expenses under applicable FHA policy. The lender should not treat a newly elevated commission month as established recurring income without the required history.
Part-time and second-job income
FHA can use part-time and secondary employment when the history and likelihood of continuance support it. Consistency matters more than the label “part-time.”
Employment gaps and job changes
A gap does not automatically kill an FHA loan. The lender evaluates the borrower's employment history and current stability. Returning to the workforce, changing employers, receiving a promotion, or changing compensation structure can all require different documentation and analysis.
Temporary leave, including parental/maternity leave
Temporary leave income is analyzed under FHA's employment-related income rules. The lender must document the borrower's intent/right to return, expected return date, and income available during the leave. If the borrower will return before or by the first mortgage payment due date, qualifying treatment can differ from a borrower whose reduced leave income will continue beyond that date.
Employment verification
The August 12, 2026 handbook update clarifies Written Verification of Employment, Electronic Verification of Employment, and Reverification of Employment. Current verification timing and documentation requirements must be satisfied before closing.
Policy source
Primary source: HUD/FHA Single Family Housing Policy Handbook 4000.1, including the August 12, 2026 update. FHA policy, AUS findings and lender overlays must be verified for the actual transaction.