Editor’s Note: This article was originally published in August 2022 and was updated to reflect updated information in February 2024 by Mike Connors.
Working as a travel nurse comes with benefits that your permanent counterparts don’t enjoy, like higher pay, greater schedule flexibility, and free travel and lodging. But when it comes time for you to buy a home, you may run into some unique challenges, as a multiple-week travel nursing contract looks to mortgage underwriters as having unsteady employment. If you’re getting a mortgage as a travel nurse and don’t know where to start, we’re here to help: read on for tips that will help you get into your dream home fast.
What paperwork will I need to prepare to get a mortgage?
The very first thing you should do when trying to obtain a mortgage as a travel nurse is to assemble all of the relevant paperwork before you reach out to any lender. This includes:
- Compensation agreements for the previous two years
- Your current travel nursing contract
- Tax returns from the past two years
- Supervisor contact information to verify employment
Rocke Andrews, president of the National Association of Mortgage Brokers (NAMB), says:
“Typically what the mortgage people want to see is at least a two year history of working in this temporary fashion. They need to see a history of regular employment in this manner and that the likelihood of continued employment is good.”
Getting all of your paperwork and documentation in order will make it easier for mortgage brokers to get a full picture of your overall compensation. If you’ve only been a travel nurse for less than two years, include your previous staff (permanent) positions.
Can I use travel nurse per diem payments as income for a mortgage?
Per diem payments do not show up on W2 or 1099 forms and are “invisible” to a mortgage underwriter as income. Bumping up the per diem pay means you have lower rates that show up on tax forms. This is great every April when you file your taxes, but not so much when trying to get a mortgage.
“The stipend or per diem is to cover additional expenses so you often can’t use that money for income,” Andrews said. “Because of this, it often isn’t usable to help you qualify for a loan.”
However, there are some exceptions for housing stipends, which we’ll cover in the next section.
Does Fannie Mae count travel nurse housing stipends as income?
Similar to per diem payments, mortgage lenders typically don’t count housing stipends as income because it is often temporary. However, Federal National Mortgage Association (Fannie Mae) guidelines specifically state you can use housing allowances as qualifying income if you can show payments over the last 12 months and demonstrate that it is likely to continue for at least three more years.
Other organizations, such as the Federal Housing Administration (FHA) don’t address the stipends or per diem pay specifically.
Can I get an FHA loan as a travel nurse?
Yes, the Federal Housing Administration (FHA) offers loans that can help travel nurses pay for their home. They do, however, require a 3.5% down payment.
How do I document gaps in my travel nursing employment?
While taking time off between assignments is a major perk for many travel nurses, having large amounts of unemployed time can lead to a loan denial. Keep a written record of how much time you’ve had off between assignments and keep in a place you can easily access.
Any time off longer than three months will need an explanation in writing, so get ahead of the ask from a mortgage underwriter and prepare that so you can send it in with your application.
What primary residence information do I need to show my mortgage lender?
Your lender often wants information on what you intend to do with your new home, so to get a mortgage, you will need to show that it will be your primary residence.
“They just need to know the reason you are buying in one region while working in another,” Andrews said. “Showing that this is where you are paying taxes, have your cars titled, have family nearby lets the underwriter show they did their due diligence confirming this is an owner-occupied residence.”
Should I write a letter explaining travel nursing to the mortgage lender?
Yes, mortgage lenders often don’t know the ins and outs of travel nursing, so sending them a letter explaining your specific situation will help them better understand how you make your money.
Write as detailed a letter as you possibly can—put travel nursing in context for the underwriter and explain how you find jobs, why you move from one agency to another, what is taxable and nontaxable income and how you decide the percentages of each. Include the personal side of why you chose the travel nursing life, such as wanting to see different places, meet new people, and gain greater professional enrichment.
Other than time, there is no real reason to not apply for a loan to see how it goes. It won’t hurt your credit score. Even if you get turned down, you will know the reasons why and start working on deficiencies for the next time.
“It is always a good idea to get approval for the loan before you actively begin to look around,” Andrews said. “You don’t want to waste time working with a real estate agent only to find out you are unable to get the loan.”
Have more questions about the intricacies of being a travel nurse? Don’t hesitate to reach out to us at www.bartonhealthcarestaffing.com