If you’re starting a new job, receiving a raise, or transitioning into a higher-paying role, the type of loan program you choose matters. Let’s break down how Conventional and FHA loans differ in Michigan when it comes to future income.
Conventional Loans in Michigan: Strict Guidelines on Future Income
Conventional loans (backed by Fannie Mae and Freddie Mac) place stricter restrictions on the use of projected income. Here’s what you need to know:
- Future income must be from a salaried position
- Hourly income is not eligible for future projection
- Property must be a primary residence
- Limited to single-family homes only
- Income must begin within 90 days after closing
If you’re relocating for a salaried job in Detroit, Grand Rapids, Ann Arbor, or anywhere in Michigan, and your start date is within 90 days of closing, a Conventional loan may allow you to use that future income to qualify. However, if:
- The job is hourly
- The property is a 2–4 unit
- The income starts beyond 90 days after closing
Conventional financing may not work. That’s where FHA could step in.
FHA Loans in Michigan: More Flexible with Future Income
FHA guidelines are often more accommodating, especially for first-time buyers and multi-unit property purchasers. FHA allows:
- 1–4 unit properties
- Hourly OR salaried employment
- Use of projected income (subject to FHA documentation standards)
This option can be crucial in Michigan’s market, especially for:
- Buyers purchasing a duplex in Flint or Lansing
- First-time homebuyers using FHA for lower down payments
- Borrowers transitioning into hourly positions
- House hackers buying 2–4 unit properties
If your employment situation doesn’t fit neatly into Conventional guidelines, FHA may offer a viable solution. If you’re planning to purchase or refinance in Michigan and your income situation includes future earnings, let’s structure it properly from day one.
