Requirements

What income counts for an FHA loan?

Short answer

Stable, documentable income that's likely to continue at least 3 years: W-2 base, salary, overtime/bonus/commission with two-year history, self-employment net (with two years of returns), Social Security, pension, disability, retirement income, and child support or alimony if court-ordered with documented payment history. Tip income, second-job income, and rental income from non-subject properties have specific rules.

Plain-English explanation

Documentation requirements vary by income type. W-2 income: pay stubs + W-2s + verification of employment. Self-employed: two years of personal and business returns + year-to-date P&L. Social Security: award letter + most recent 1099 if applicable + bank statements showing receipt. Pension: award letter + bank statements. Disability: SSDI award letter, VA disability award letter, or other private disability documentation. Child support / alimony: court order + 6–12 months of documented receipt + 3+ years of remaining duration. Non-taxable income (Social Security, some disability) can sometimes be grossed up by an underwriting factor (commonly 15–25%, lender-specific). Tip income generally needs two years of W-2 reporting. Subject to FHA/HUD guidelines and lender overlays.

Practical example

A retired buyer qualifies on $2,400/month Social Security plus a $1,800/month pension — both documented. With a 25% gross-up on the non-taxable Social Security portion, qualifying income for DTI calculations becomes $3,000 + $1,800 = $4,800. Same buyer's second-job tip income of $400/month doesn't count without two years of W-2 reporting.

What can change the answer?

Income type, employment history, debt ratio, reserves, automated underwriting findings, and lender overlays can change the answer.

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FHA guidelines are the rule. Your credit, income, payment, property, and county limit are what decide the actual answer.

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