We sometimes get questions from potential home buyers who are wondering if the unemployment income they receive can be counted towards qualifying for a mortgage. Sometimes it can, and sometimes it can’t.
Here are the rules you need to know regarding unemployment income.
If you are a seasonal worker, we can count your unemployment income, with certain restrictions. A couple of examples of seasonal workers who would be able to count their unemployment income are:
- Landscape workers. These employees typically work for the majority of the year, but in the winter months, they usually get laid off. While they are laid off, they can collect unemployment benefits.
- Union members who have contracts for a specific job can usually collect unemployment benefits while they are between jobs.
Here are the restrictions on counting unemployment income:
- You must have received the unemployment benefits for at least two years. To document this, we need copies of your last two years of federal tax returns.
- We need to verify with your employer that there is a reasonable expectation that the seasonal income will continue, meaning the employer must state in writing that they are planning to rehire you when work is available again.
If you are not a seasonal worker, but are collecting unemployment benefits because you have been laid off, we cannot count it when qualifying you for a mortgage. Only seasonal workers (or workers such as the union employees mentioned above) can use their unemployment income to qualify.
There are many rules regarding qualifying income. Make sure you contact us if you want to know exactly what the rules are.