Employment History Requirement for a Discharged Veteran

Question:

My veteran client left the military 8 months ago and is now working as a technician for a farm equipment company.  He is full-time and only needs his base rate to qualify.  My question is whether we can use his income if it has not been for an entire year.

Answer:

VA allows the underwriter to determine if the income of a recently discharged veteran is likely to continue. If the new job is completely unrelated to the duties performed in military service, then it’s common for an underwriter to want to see at least a 1-year history of employment in that field to consider the income stable. If it is related to what he did in the military, then they may consider the income as stable even if it is less than a year.  I would try to determine if the job is similar to the one he had in the military and then discuss this with your underwriter to see if they will accept the income.

Reference:

VA Lenders Handbook Chapter 4, Topic 2

m. Verification and Analysis of Income of Recently Discharged Veterans or Veterans to be Discharged from the Military

Analysis of Prospects for Continued Employment

Cases involving recently discharged Veterans often require the underwriter to exercise a great deal of judgment and flexibility in determining whether the employment income will continue in the foreseeable future. This is because some Veterans may have little or no employment experience other than their military occupation. Continuity of employment is essential for a Veteran with no retirement income, or insufficient retirement income, to support the loan obligation. If the duties the borrower performed in the military are similar or directly related to the duties of the present position, use this as one indicator that the employment is likely to continue.

Mortgage Currentcy hosts an All Agency Income Analyzer on “Employment History.” You can find this resource under “Income Analyzers”.