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Interesting question. I had always thought that unemployment compensation could not be considered for income in qualifying for a loan. But, I did find a situation where the compensation could be used. Say for example a person was a seasonal employee, such as a ski instructor in the winter but each and every year that person was laid off until the next season. In that situation, to where you could determine a pattern of employment and then laid off also in a pattern, the unemployment compensation could be used for an FHA transaction. In your situation however, because this is a new situation for you and there is not a likely probability or pattern that you will be called back to work, the unemployment compensation will not be eligible for qualification. Fortunately, even if there is an extended timeframe of unemployment, once you have gained new employment, you will likley be immediately eligible again.
Unfortunately, most underwriting (Fannie Mae, Freddie Mac, FHA, most portfolio lenders) standards require that the income must be expected to continue for at least 3 years in order to utilize it for qualification purposes. While no one knows for certain that any income is permanent (especially nowadays), some income sources can be perceived as more stable than others … . a job with solid history and good market conditions, for instance, would be expected to continue. Unemployment benefits are usually limited to 26 weeks or less … so unless you have a seasonal history of receiving both unemployment and work income (such as a seasonal worker that has a predictable pattern over many years), or long-term unemployement/disability/etc income that is stated as permanent or semipermanent, the income from your unemployment is not likely to be used for your loan application.
If you are actively seeking work in the same trade or field, keep track of your unemployment, though … once you secure a permanent position, the underwriter will view your total history – the 5 years of stability beforehand, your reaction, and the expected income of your new position (usually documented by a letter from the employer and your first paycheck) in order to but your “best borrowing foot” forward. Best of luck!
i will be out of a job next month after 5 years will i qualify for a home loan on my unemployment check?