FHA employment gap rules: the six-month test

What counts as an extended absence

The Handbook sets a bright line at six months. For borrowers with gaps in employment of six months or more, it calls the gap an extended absence and gives a path to count current income. Below six months, the extended-absence conditions do not apply, though a lender will still look at your whole work history and the general employment verification rules. The Handbook does not define shorter gaps as a problem on their own, and nothing on this page should be read as saying they are free of scrutiny.

The two conditions to use current income

To count your current income after an extended absence, the lender must verify and document two things. First, you have been employed in your current line of work for at least six months at the time of case number assignment. Second, you have a two-year work history before the absence, shown by standard or alternative employment verification. Both are required. Someone who returned to work four months ago fails the first condition. Someone with six months in a new job but only 14 months of documented work history before a long absence fails the second.

A worked example

A nurse stopped working to care for a parent, was out of work for nine months, and returned to a similar nursing position seven months before applying. The gap is above six months, so it is an extended absence. Seven months in the current line of work meets the six-month condition. If the nurse can document two years of nursing before the absence, current income may be used. If the same nurse had returned only five months earlier, the first condition would fail, and the checker would flag that. Enter your own numbers above to test them. The tool can only apply the rule as written; the lender decides what counts as adequate documentation.

Frequent job changes are a different test

A separate rule covers borrowers who change jobs often. If you have changed employers more than three times in the previous 12 months, or have changed lines of work, the lender must take extra steps to verify and document the stability of your employment income. It does not have to do this for fields where workers regularly move between employers, such as temp companies or union trades. The extra evidence it must collect is either transcripts of training and education showing you are qualified for the new position, or employment documentation that shows continual increases in income or benefits.

Temporary reductions: disability and leave

A gap is not always a total absence. For a temporary reduction of income because of a short-term disability or similar leave, the lender may consider your current income if it documents that you intend to return to work, have the right to return, and still qualify for the mortgage taking the reduced income into account. If you return before or at the time of the first mortgage payment, the lender may use your pre-leave income. If you return after the first payment date, it may use current income plus surplus liquid asset reserves above any required reserves as an income supplement, up to your pre-leave income; the monthly supplement is the surplus reserves divided by the months between the first payment date and your return date. The lender must collect a written statement of your intent to return and the date, documentation from your employer confirming your eligibility to return, and evidence of enough liquid assets.

Government shutdowns and similar events

The same section lets a lender use income from before a government shutdown for federal, state, tribal or local government employees who are temporarily out of work because of it or a similar temporary event, where lost income is expected to be recovered.

Practical steps

Write down your timeline before you apply: when each job started and ended, and the length of every break. Gather W-2s, written employment verifications or similar records covering the two years before the gap. If you are close to the six-month mark in a new role, waiting a few weeks can change the answer. Related income rules matter too: if your new job is part time, see the part-time income page, and if you are newly self-employed, see the two-year self-employment rule.

Sources

• HUD Handbook 4000.1, FHA Single Family Housing Policy Handbook, Update 18 PDF: Underwriting the Borrower Using the TOTAL Mortgage Scorecard, Additional Required Analysis of Stability of Employment Income: Frequent Changes in Employment, Addressing Gaps in Employment, Addressing Temporary Reduction in Income, Handbook pp. 233-235 (heading Income Requirements (TOTAL) (11/10/2026)(04/10/2025)). Read November 2, 2026.
• HUD, Single Family Housing Policy Handbook 4000.1 information page. Read November 2, 2026.

Text read: HUD Handbook 4000.1, FHA Single Family Housing Policy Handbook, the clean Update 18 PDF that HUD links from its Handbook 4000.1 information page (HUD lists it as the August 12, 2026 update). Section headings carry their own effective dates, given above for this page. Confirm current dollar limits and premium rates with an FHA-approved lender. This page paraphrases the Handbook and does not replace it. Page numbers cited are the Handbook's own and may be approximate; use the section headings to locate the text.