Mackenzie Almost Lost the House Over a Job Change: The VA Income Rule
Mackenzie almost lost the house under contract, all because a lender looked at a recent job change and decided the income didn't count. Mackenzie is a fictional, illustrative VA loan buyer house hunting near Camp MacKall, NC, but the situation comes up often enough that it deserves a closer look. Eligibility was treated as confirmed separately. The only open question was the paycheck.
What went wrong for Mackenzie
Mackenzie had recently moved into a new position. On paper, that meant a short history with the current employer. The lender saw that short history and treated it as a reason to set the income aside. No analysis was shared, just a conclusion: this income doesn't count.
That is a stressful place to be with a contract in motion. But a conclusion is not the same as an analysis, and the VA guideline asks for an analysis.
What the VA guideline actually says
The VA guideline begins with a definition: "Income is considered effective when it is determined to be verifiable, stable and reliable, and anticipated to continue for the foreseeable future." Notice what is missing. There is no blanket rule that a new job disqualifies you.
The guideline continues: "Income analysis is not an exact science. It requires the lender to underwrite each loan on a case-by-case basis, using good judgement and flexibility when warranted."
Then it explains how stability is judged: "To determine whether income is stable and reliable, the probability of continued employment must be determined through examination of the: borrower's past employment record, borrower's training, education, and qualifications for his or her current position, and/or type of employment."
Finally: "Only verified income can be considered in the repayment calculation."
Reading it the way an underwriter has to
There are three things the lender is directed to examine. First, your past employment record, which is bigger than just the current job. Second, your training, education, and qualifications for the position you now hold. Third, your type of employment. The goal is to judge the probability of continued employment.
That means a recent job change is one fact inside a larger picture. If the new position builds on the same training, education, and past work, that is relevant to whether the income is likely to continue. The lender is expected to use judgement and flexibility, not a reflex.
The last sentence matters just as much. Only verified income can be considered. So your job is to help the lender verify what you can.
The tactic Mackenzie used
Mackenzie stopped arguing and asked the lender to show its work. Here is the question, word for word:
"Can you show me how you evaluated my past employment record, my training, education, and qualifications for my current position, and my type of employment, under the VA effective income guideline? And what verified documents would let you consider them?"
Then Mackenzie requested the answer in writing.
There are two parts to that question, and both do work. The first part asks the lender to connect its decision to the guideline's three factors. The second part turns a vague no into a specific list of what would change the outcome. Getting it in writing means the answer cannot quietly shift from one phone call to the next.
How you can use this today
If your income has been questioned, whether from a recent job change or non-standard employment, do these things:
Step by step
Ask the question above, using the guideline's own words. Ask for the response in writing. Gather whatever verified documents the lender says would let it consider your income. And if the answer still doesn't connect to the three factors, it may be worth having another lender look at the file.
This is not about pressuring anyone. It is about making sure the guideline gets applied as written.
Where I come in
I am Jason Sharon, a licensed mortgage broker with Home Loans Inc. My job is to find the path when a file gets complicated. If a lender has questioned your income, call me at 843-LOW-RATE and we will look at it together.
Home Loans Inc - Jason Sharon, Mortgage Broker. Company NMLS #1728740, Jason Sharon NMLS #1281448. Equal Housing Opportunity.
Learn more about this loan program: Mackenzie Almost Lost the House Over a Job Change
