What are the requirements for borrowers who work for a staffing agency?
Borrowers employed through a staffing agency are treated as wage earners and are eligible for mortgage financing, provided the file documents income stability and continuity across rotating assignments. Frequent employer changes alone do not disqualify the borrower under FHA or Fannie Mae guidelines.
Agency Guideline Requirements
FHA — Temp Company Employment (TOTAL Scorecard and Manual Underwriting)
When a borrower has changed employers more than three times in the prior 12-month period, FHA carves out a specific exception for temp company workers:
"Additional analysis is not required for fields of employment that regularly require a Borrower to work for various employers (such as Temp Companies or Union Trades). The Mortgagee must obtain: transcripts of training and education demonstrating qualification for a new position; or employment documentation evidencing continual increases in income and/or benefits."
- Acceptable current employment documentation: most recent pay stub showing year-to-date earnings plus a written VOE covering two years, OR direct electronic third-party vendor (TPV) verification covering two years.
- Reverification of employment must be completed within 10 days prior to the Note date; verbal or electronic reverification is acceptable.
FHA — Employment Gaps of Six Months or More:
"The Mortgagee may consider the Borrower's current income as Effective Income if it can verify and document that: the Borrower has been employed in the current line of work for at least six months at the time of case number assignment; and a two-year work history prior to the absence from employment using standard or alternative employment verification."
Fannie Mae — Employment Stability and Job Changes
- "Borrowers who change jobs frequently, but who are nevertheless able to earn consistent and predictable income, are considered to have a reliable flow of income for qualifying purposes."
- "When the borrower's employment history includes different employers, in no instance may the borrower have any gap in employment greater than one month in the most recent 12-month period, unless the employment is considered seasonal income."
- For tip, bonus, and overtime income: "A minimum two-year history is recommended; however, income received for a shorter period, but no less than 12 months, may be considered as acceptable if there are positive factors to reasonably offset the shorter income history."
Fannie Mae — VOE for Union/Short-Term Assignment Workers:
"If the borrower is a union member who works in an occupation that results in a series of short-term job assignments (such as a skilled construction worker, longshoreman, or stagehand), and the union facilitates the borrower's placement in each assignment, the lender may obtain the verbal VOE from the union."
- Note: For staffing agency borrowers, direct this VOE to the staffing agency as the W-2 employer of record, not the worksite employer.
Lender Overlays and Program-Specific Requirements
Windsor Mortgage (Fannie Mae / Freddie Mac)
"Fannie Mae and Freddie Mac generally require verification of the borrower's employment for the two full years that precede the mortgage application. However, when a borrower who is new to the workplace cannot document income and employment for this length of time, the documentation should relate to the length of time that they have been employed."
- VOE requirements: independently obtain employer's phone number; confirm current employment within 10 days of closing; document name/title of person confirming, date of call, and source of phone number.
Mega Capital — Conventional DU / Agency Programs
- WVOE as sole income document is acceptable per DU findings if the WVOE is from The Work Number.
- For secondary/multiple jobs: "Verification of a minimum history of two (2) years of uninterrupted secondary employment income is recommended. However, income that has been received for a shorter period of time (no less than 12 months) may be considered as acceptable income, as long as there are positive factors to reasonably offset the shorter income history."
- Commission, bonus, and overtime: minimum 12 months of history required for these income types to be considered stable.
Mega Capital — Silver Jumbo Program
- For union/variable placement workers: "For a union member who works in an occupation that results in a series of short-term job assignments (such as a skilled construction worker, longshoreman, or stagehand), the union may provide the executed employment offer or contract for future employment."
- For variable income (applicable where staffing assignments produce fluctuating hours): "Typically two years or more of receipt of the variable income is recommended; however, a shorter time period of 12 to 24 months may be considered as acceptable... It is also important to establish an earnings trend. The earnings trend must be evaluated and the amount that is most likely to continue for the next 3 years must be used to qualify."
- "Income stability takes precedence over job stability."
- Re-entering the workforce: income may be considered effective if the borrower was attending school, in a related training program, or in the military immediately prior to current employment; college transcripts or discharge papers required.
Mega Capital — HELOC Program
- "A minimum of 2 years employment history and continuance of income for 3 years is generally required for all Borrower's whose income is being used to qualify."
- "Consider both the length of the Borrower's employment with any one employer and the stable and reliable flow of income. When evaluating a Borrower who has frequent job changes or unemployment, focus on whether the changes have affected the Borrower's ability to repay their obligations. If the Borrower provides documentation of a consistent level and type of income and the ability to pay their obligations despite changes in the source of that income, it can be presumed that the Borrower's income level is stable."
- Employment gap rule: "Borrower who is re-entering the work force after an extended absence (6 months or more) may be considered to have stable employment if all the following is met: The Borrower has been employed in their current job for 6 months or more AND The most recent two-year employment history, including gaps in employment is documented."
Documentation and Verification Checklist
- Pay stubs: Most recent stub dated within 30 days of application, showing year-to-date earnings
- W-2s: Two most recent years, from all employers
- VOE: Written VOE (WVOE / Form 1005) or automated verification via The Work Number; verbal VOE required within 10 business days of the note date
- FHA temp worker file: Must include either training/education transcripts OR documentation of continual income increases
- TPV data: If used, must be no more than 35 days old as of the note date
Income Continuity — Key Underwriting Factors
- Assignments must be consistent and ongoing; underwriter must affirmatively assess likelihood of continuance
- Variable hours: average over 24 months (or 12 months if income declined and then stabilized); declining trend without stabilization is not usable
- Gaps of more than one month in the most recent 12-month period on secondary income disqualify that income under Fannie Mae standards
- Jumbo/non-QM: 12–24 months of history acceptable with compensating factors; variable income must demonstrate stable or increasing trend expected to continue for at least three years
