g. Analysis:  Recent History of Frequent Changes of Employment

Short-term employment in a present position combined with frequent changes of employment in the recent past requires special consideration to determine stability of income.  Analyze the reasons for the changes in employment.

Reference:  See section 4 of “Current Issues” for a discussion of frequent job changes by individuals with low-to-moderate incomes.

Give favorable consideration to changes for the purpose of career advancement in the same or related field.

Favorable consideration may not be possible for changes

·   with no apparent betterment to the applicant, and

·   from 1 line of work to another.

If the lender includes applicant’s income in effective income, an explanation must accompany the loan submission.

h. Income from Overtime Work, Part-time Jobs, Second Jobs, and Bonuses

Generally, such income cannot be considered stable and reliable unless it has continued (and is verified) for 2 years.

To include income from these sources in effective income:

·   The income must be regular and predictable, and

·   there must be a reasonable likelihood that it will continue in the foreseeable future based on

-   its compatibility with the hours of duty and other work conditions of the applicant’s primary job, and

-   how long the applicant has been employed under such arrangement.

The lender may use this income, if it is not eligible for inclusion in effective income, but is verified for at least 12 months, to offset debts of 10 to 24 months duration.  Include an explanation.