Using Overtime to Qualify on FHA Loans
Although FHA guidelines do state that Overtime pay should have a two year history, a Direct Endorsement Underwriter can make an exception to use overtime with only a 1 year history. A direct endorsement underwriter can also take previous job history and recent transfers into account when calculating overtime for someone who doesn’t have a full 2 year history. So if a borrower has less than a 2 year history of overtime you should build a strong case (if it can be built) and present it to an FHA DE Underwriter and see how they feel about the circumstances.
One of the great benefits of FHA loans is the authority a Direct Endorsement Underwriter has to make judgement calls in good situations.