Last week brought a full slate of jobs data, and the overall picture was more encouraging than expected. The Bureau of Labor Statistics reported that total nonfarm payroll employment edged up by 115,000 in April — above forecasts of around 60,000 — with job gains in health care, transportation and warehousing, and retail trade. Federal government employment continued to decline. The unemployment rate held steady at 4.3%.

ADP’s private payroll report also topped expectations, with private employers adding 109,000 jobs in April. Revelio Labs reported approximately 66,000 job gains — still a modest pace of hiring, but the strongest reading since last June. Together, these reports suggest the labor market may be stabilizing after several slower months.

The broader picture was more mixed. Job openings slipped to 6.87 million in March, continuing a longer-term decline from the peak levels seen in 2022. New unemployment claims remain relatively contained around 200,000, but continuing claims stayed elevated at 1.77 million — meaning it’s taking longer for displaced workers to find new positions. Layoff announcements also moved higher in April, with more than 83,000 cuts reported.

Despite the mixed signals in the labor market, housing continues to show resilience. New home sales beat expectations in both February and March, and Cotality now projects home prices to rise approximately 5.1% over the next year — meaningful for anyone on the fence about buying.

Mortgage rates: Optimal Blue Index: Mortgage rates, as of last Friday, May 8, 2026 are essentially the same as what last week’s report. Last week’s rates are old news – I share the Optimal Blue Index to show where mortgage rates are trending. I’m happy to provide you with a mortgage rate quote based on your personal scenario.

Economic Calendar: Week of May 11

Here’s what’s on tap this week:

• Monday: Existing Home Sales
• Tuesday: NFIB Small Business Optimism Index, ADP Employment, CPI (Consumer Price Index) — the big one to watch
• Wednesday: PPI (Producer Price Index), 30-Year Bond Auction
• Thursday: Jobless Claims, Retail Sales
• Friday: Empire State Manufacturing Index

Next FOMC rate decision: June 17, 2026

Tuesday’s CPI report will be the most closely watched release of the week. With geopolitical tensions and inflation concerns in focus, this data will carry extra weight for mortgage rates.

Where are mortgage-backed securities this morning?

As of approximately 9:10 a.m. Pacific, mortgage-backed securities (MBS) are down slightly. There’s no peace deal in Iran, and with CPI releasing tomorrow, markets are pricing in the possibility that inflation prints higher — which is putting upward pressure on rates. Mortgage rates are in a position to move higher as the week unfolds.

In the Spotlight: Updated Homebuyers Guide

This week I want to highlight something I’m really excited about: my completely updated Homebuyers Guide. If you or someone you know is thinking about buying a home — especially for the first time — this is a resource I put together just for you. It walks through the entire process in plain language so you feel informed and confident every step of the way.

Ready to talk through your mortgage options? I’m here to help — no pressure, no obligation.  Serving Homebuyers and Homeowners in Washington State

When it comes to getting a mortgage, how much you earn matters — but so does how you earn it. A W-2 salary looks very different to an underwriter than an hourly wage, a part-time paycheck, or income from a second job. And if you’ve recently started a new position or are expecting a pay increase, there are specific guidelines that govern whether that income can even be used to qualify.

Let’s break it all down.

Salaried Income

Note: Fannie Mae significantly updated its Income Assessment guidelines in March 2026 (effective June 1, 2026). Several of the rules below reflect those current standards.

If you’re a salaried employee with a consistent annual pay rate, qualifying your income is usually the most straightforward of all employment types. Under current Fannie Mae guidelines, salary falls into the category of fixed base income — meaning a set pay rate that doesn’t depend on hours worked. Lenders will typically verify your salary using:

• A written Verification of Employment (VOE) from your employer
• Recent pay stubs (usually covering the most recent 30 days)
• W-2s from the prior two years
• Federal tax returns (required in some scenarios)

Your qualifying income is simply your annual salary divided by 12. If you earn $90,000 per year, your monthly qualifying income is $7,500 — straightforward math.

One meaningful update from Fannie Mae’s 2026 guidelines: for fixed base income (salary or guaranteed hourly), there is no minimum employment history required for the income to qualify. What matters is that your current income is consistent with your year-to-date earnings. This is a significant shift from older guidance that implied two years in the same role was necessary.

That said, lenders still look at your overall employment history for context — gaps, recent industry changes, or a pattern of job-hopping can raise questions even if the current income checks out. A logical career progression — such as a promotion, a lateral move within the same field, or a shift from hourly to salaried in the same industry — is generally acceptable.

New Job, Same Field

Starting a new salaried position shortly before applying for a mortgage? That’s not automatically a dealbreaker. If you’ve started your new job before the application date, lenders can typically use that income. They’ll want documentation — an offer letter, pay stubs if available, and confirmation of start date — but a new job in the same field with equal or greater pay is usually workable.

Hourly Income: Fixed vs. Variable Makes All the Difference

Hourly income introduces more complexity because it may or may not be tied to a consistent number of hours. Fannie Mae’s updated 2026 guidelines formalize a distinction that underwriters have always applied in practice:

• Fixed hourly income — a set hourly rate with a guaranteed minimum number of hours. Minor variances from pay period to pay period don’t disqualify the income from being treated as fixed. This is treated similarly to salary, with no minimum history requirement.
• Variable hourly income — a fixed hourly rate with fluctuating hours, or an hourly rate that itself varies. This requires a minimum 12-month history and is averaged over time rather than taken at face value.

If your hours are consistent and guaranteed, the calculation is simple: hourly rate × average weekly hours × 52 weeks ÷ 12 months. If you earn $35/hour and consistently work 40 hours per week with a guaranteed schedule, your qualifying income is:

$35 × 40 × 52 ÷ 12 = $6,066.67/month

If your hours vary — say you work between 32 and 45 hours per week — your income is treated as variable. Lenders will average your hours over at least the most recent 12 months (Fannie Mae allows averaging using current hourly rate × average monthly hours) rather than using a peak or assumed figure. Under the current guidelines, lenders can use either an average income method (year-to-date plus prior year) or an average hours method (average monthly hours × current rate), with a minimum of 12 months of history required either way.

One important nuance for variable hourly workers: any future pay raises must be in place before closing to be used in qualifying. The ability to use a future pay rate — which exists in limited circumstances for fixed/salaried income — does not apply to variable hourly income under Fannie Mae guidelines.

Overtime and Shift Differentials

Overtime pay and shift differentials can be counted — but lenders typically require a two-year history of receiving that additional pay and an expectation that it will continue. Your employer may need to confirm that overtime or shift differential is likely to continue. One strong year of overtime won’t automatically qualify; lenders want to see consistency.

New Freddie Mac Guidelines: Hourly Income Starting After the Note Date

Freddie Mac recently updated its guidelines around income that begins after the Note Date (the date your loan closes). This matters if you’re closing on a home while transitioning to a new job or a new pay rate. Here’s what changed:

New Employer, Hourly Wage

Hourly earnings from a new employer may now be used to qualify — provided there is a guaranteed minimum number of weekly hours documented in the offer letter or employment contract. The key word is “guaranteed.” If hours are variable or at-will, that income cannot be used. The employer needs to commit to a specific minimum, not just describe a typical schedule.

Current Employer with a Future Pay Increase

If you’re staying with your current employer but getting a raise that takes effect after closing, Freddie Mac will allow the new (higher) rate to be used to qualify — but only when documentation in the mortgage file demonstrates that both current and future hours do not fluctuate. You can’t use a future pay rate if your hours vary, even if the rate itself is locked in.

Funds Verification Requirement — Removed

Previously, when there were more than 15 calendar days between the Note Date and the start of new employment, lenders were required to verify additional funds beyond standard closing costs and reserves. Freddie Mac has removed that requirement when income documentation is obtained after the Note Date but before the Delivery Date (when the loan is delivered to Freddie Mac). This is a meaningful simplification for borrowers starting new jobs shortly after closing.

10-Day Pre-Closing Verification Now Required for All

When income documentation is obtained after the Note Date, Freddie Mac now requires a 10-day pre-closing verification (PCV) for all mortgages — no exceptions. This verification confirms employment status is still active before the loan closes.

The Bottom Line on Post-Note-Date Income

Freddie Mac is explicit: income commencing after the Note Date must always be non-fluctuating employment earnings. Variable income, commission, or anything that isn’t a predictable fixed or guaranteed hourly amount does not qualify under these rules.

Part-Time Income: Yes, It Can Count

Part-time income is often misunderstood. Many borrowers assume that working part-time disqualifies them from a mortgage — that’s not true. What lenders care about is whether the income is fixed or variable, and whether it’s likely to continue.

If your part-time job pays a guaranteed hourly rate with guaranteed minimum hours, it may qualify as fixed base income — and under Fannie Mae’s current guidelines, there’s no minimum history requirement for fixed income to qualify. If your hours fluctuate, it’s treated as variable income, which requires at least a 12-month history of receipt.

In practice, lenders will also want to see:

• Evidence that the income is likely to continue
• Documentation showing your pay rate and hours (pay stubs, W-2s, VOE)
• Year-to-date earnings consistent with the qualifying amount

If you picked up a part-time job just a few months ago with variable hours, lenders will likely hold off counting it until there’s enough history to average. If it’s a fixed schedule with guaranteed pay, the story is different — and worth discussing with your loan officer early.

Part-time income from a second job (see below) follows similar rules, but there are a few distinct considerations.

Second Job Income

Some borrowers work two jobs — a primary full-time position and a secondary part-time or flex role. Good news: both can count toward qualifying income, but the second job typically needs to meet the same two-year history requirement.

Things lenders look for with second job income:

• Two-year history at the second job (or in some cases, a one-year history with strong documentation and a longer record in a similar role)
• Confirmation that working two jobs has not negatively impacted primary employment
• Consistency — sporadic or seasonal second-job income is treated more cautiously

If you recently started a second job to boost your qualifying income before applying for a mortgage, that strategy may not pay off immediately. Lenders may require that income to season for a year or two before it can be included.

Variable Income: The Nuanced Category

Variable income includes anything beyond a fixed base wage or salary — hourly income with fluctuating hours, tips, commissions, seasonal work, and so on. The defining characteristic is that the amount changes period to period.

Under Fannie Mae’s current 2026 guidelines, variable income requires a minimum 12-month history of receipt (updated from older guidance that commonly cited 24 months). Lenders calculate qualifying income by averaging — using year-to-date earnings and the prior year, with at least 12 months’ worth of data.

How the trend affects your qualifying income:

• If income is stable or increasing, lenders calculate an average using year-to-date plus the prior year’s earnings — minimum 12 months of history required.
• If income is declining, lenders must first confirm the income has stabilized. If it hasn’t, the income is not eligible for qualifying at all. If it has stabilized, lenders use year-to-date income divided by months elapsed in the current year — not a historical average that would inflate the number.
• Gaps in variable income — like a period away from work followed by a return — may allow lenders to exclude that gap period from the calculation if the event was documented as non-recurring and outside the borrower’s control.

The bottom line: declining variable income is a red flag that lenders take seriously. If your commissions, tips, or variable hours have been dropping, don’t assume lenders will average around it.

How Loan Type Affects Income Qualifying

The guidelines above apply broadly, but the specific loan program you’re using can affect the details:

Conventional Loans (Fannie Mae / Freddie Mac)

Most of the rules described in this post apply to conventional financing. Both agencies publish detailed guides that lenders must follow. Notably, Fannie Mae updated its entire Income Assessment chapter in March 2026 — effective June 1, 2026 — introducing clearer definitions for fixed vs. variable income, updating history requirements, and reorganizing how income is calculated and documented. Freddie Mac’s recent hourly income updates for post-Note-Date employment (described above) are specific to its program. If your lender references older income guidelines, it’s worth asking whether they’ve updated their overlays to reflect the current guides.

FHA Loans

FHA has its own income guidelines published in the FHA Single Family Housing Policy Handbook. In many cases, FHA is similar to conventional guidelines — two-year history, averaging of variable income — but there are some differences, particularly around part-time income and gaps in employment. FHA can be more flexible in certain scenarios, such as borrowers returning to work after a medical leave.

VA Loans

VA guidelines tend to be more flexible than conventional in some areas. VA uses a concept called “residual income” in addition to debt-to-income ratio, which can work in a borrower’s favor. Part-time and second-job income can often be used with less seasoning if the borrower has a strong overall profile.

USDA Loans

USDA loans are available in eligible rural areas and have income limits in addition to income documentation requirements. They generally follow similar standards to conventional financing for employment income.

Tips for Borrowers with Complex Income

If your income situation is anything other than straightforward salaried employment, here’s practical advice:

• Talk to a lender early. Before you start house hunting, have a thorough conversation about your income sources. Getting pre-underwritten — not just prequalified — means your income documentation has actually been reviewed, not just estimated.
• Keep clean records. Two years of tax returns and W-2s are often required. Make sure you’ve filed on time and that your returns accurately reflect your income.
• Don’t change jobs right before closing. Lenders verify employment multiple times during the loan process, including shortly before closing. A job change — even a positive one — can delay or derail a closing if it’s not handled carefully.
• Document everything about new employment. If you’re starting a new job around the time of your purchase, get your offer letter, confirm your start date in writing, and work with your loan officer to understand exactly what documentation will be needed and when.
• Understand what lenders see vs. what you experience. Your gross income before taxes and deductions is what lenders use — not your take-home pay. But your tax returns are also reviewed, so significant write-offs that reduce taxable income can affect qualifying, especially for self-employed borrowers.

The Bottom Line

Income qualifying isn’t one-size-fits-all. Whether you’re a salaried employee, an hourly worker, someone juggling two jobs, or earning variable income from a range of sources — there’s a path to mortgage qualifying, but the documentation requirements and calculations vary by income type and loan program.

2026 has brought meaningful guideline updates from both Fannie Mae and Freddie Mac. Fannie Mae’s March 2026 overhaul clarifies the fixed vs. variable income distinction, updates variable income history requirements to a 12-month minimum, and tightens the rules around declining income. Freddie Mac’s recent hourly income updates help borrowers navigating job transitions around closing time — including removing the extra funds verification requirement that previously applied. These aren’t small technical tweaks. They affect real borrowers, real qualifying scenarios, and in some cases open doors that were previously closed.

Have questions about how your specific income situation will be viewed by an underwriter? I’d love to help. Reach out here or give me a call — this is exactly the kind of conversation I have with borrowers every day, and I’d rather talk through it early than have surprises later.

This post is part of a series on how lenders treat different types of income. Also see: How Bonus Income Is Qualified for a Mortgage and How RSU Income Is Qualified for a Mortgage.

Frequently Asked Questions

Does my salary income require a minimum employment history to qualify for a mortgage?

Under Fannie Mae’s updated 2026 guidelines, fixed base income — including salary and guaranteed hourly wages — has no minimum history requirement. What matters is that your current income is consistent with your year-to-date earnings. However, overall employment history is still reviewed for context, and gaps or frequent job changes can still raise underwriter questions.

How do lenders calculate qualifying income for hourly workers?

It depends on whether your hours are fixed or variable. If you have a guaranteed minimum number of hours, lenders use: hourly rate × weekly hours × 52 ÷ 12 to get your monthly qualifying income. If your hours fluctuate, your income is treated as variable and averaged over at least the most recent 12 months of history.

Can part-time income be used to qualify for a mortgage?

Yes. If your part-time job has a fixed schedule with guaranteed hours, it may qualify as fixed base income with no minimum history requirement. If your hours vary, it’s treated as variable income and requires at least a 12-month history. The key is whether the income is consistent and likely to continue — not the number of hours per week.

How long do I need to have a second job before it counts toward mortgage qualifying?

Second job income generally needs a two-year history to be used for qualifying under conventional guidelines. In some cases, a one-year history may be acceptable with strong documentation. If you recently added a second job specifically to boost your qualifying income, lenders will likely need to see that income season before counting it.

What happens if my variable income has been declining?

Declining variable income is treated seriously under current Fannie Mae guidelines. Lenders must first confirm that the income has stabilized. If it hasn’t, the income cannot be used for qualifying at all. If it has stabilized, lenders use year-to-date income divided by months elapsed — not a historical average. Be prepared to explain the decline and demonstrate that it has leveled off.

Can I use income from a new job that starts after my closing date?

Under Freddie Mac’s updated guidelines, yes — in limited circumstances. Hourly income from a new employer starting after the Note Date can be used if the offer letter or contract guarantees a minimum number of weekly hours. The income must be non-fluctuating. A 10-day pre-closing verification of employment is now required for all loans where income documentation is obtained after the Note Date.

What changed in Fannie Mae’s 2026 income guidelines?

Fannie Mae overhauled its entire Income Assessment chapter in March 2026, with a compliance deadline of June 1, 2026. Key changes include formal definitions for fixed vs. variable base income, a reduced minimum history requirement for variable income (now 12 months, down from a commonly applied 24), updated rules for declining income scenarios, and a clearer structure for how income continuance is evaluated.

Does overtime count as qualifying income for a mortgage?

Overtime can count, but it’s treated as variable income — not fixed base pay. Lenders typically require a 12-month history of receiving overtime and confirmation that it is likely to continue. One strong year of overtime earnings is generally not enough on its own; consistency over time is what matters.

A few years ago, a mom called to make an appointment — not for herself, but for her two adult children. She was proud of them, both hard-working and responsible, and she thought they should be buying a home instead of renting. They came in together, and it turned out to be one of my favorite kinds of consultations.

Mortgage Rates This Week

According to the Optimal Blue index — which reflects about 35% of mortgage transactions across the country — the average 30-year fixed rate as of last Friday came is slightly higher week over week.

A few important caveats: this is an index, not a quote. You cannot lock in last Friday’s rate today, and your actual rate will depend on your credit score, down payment, loan type, and other factors. Think of it as a directional indicator, not a price tag. For current mortgage rates based on your personal scenario, please contact me!

As of Monday morning, mortgage-backed securities are down approximately 28 basis points with an alert to lock. If you are currently under contract, contact your loan officer today about locking your rate.

Economic Calendar: It’s Jobs Week

This is one of the most important weeks on the economic calendar — and it has direct implications for mortgage rates. Here’s what’s coming:

• Tuesday — JOLTS (Job Openings and Labor Turnover Survey) + New Home Sales
• Wednesday — ADP Employment Report (consensus: ~100,000 new private sector jobs)
• Thursday — Weekly Jobless Claims
• Friday — BLS Jobs Report (consensus: ~60,000 new jobs, 4.3% unemployment rate)

Employment data moves the bond market — and the bond market moves mortgage rates. A weaker-than-expected jobs report typically pushes rates lower. A stronger report can push them higher. With reports dropping every day this week, expect some volatility in rate pricing.

The next Fed rate decision is June 17, 2026. Policymakers have been in a holding pattern, watching inflation and employment data closely before making any moves. This week’s numbers will directly inform that conversation.

The Real Cost of Waiting: A Side-by-Side Look

One of the most common questions I hear right now is: “Should I just wait for rates to drop before I buy?” I ran the numbers — and the answer might surprise you.

I used a Fannie Mae HomeReady loan — a program that allows just 3% down and is designed for buyers with moderate income — on a $600,000 home in the 98056 zip code (Renton area). Appreciation forecasts are specific to that market; rate projections come from Fannie Mae. Check out the video for all the details!

Is Now Right for You?

This analysis is based on market forecasts and averages — your situation will be unique. But if you’ve been waiting for the “perfect” moment, it’s worth asking: what is that wait actually costing you?

I can run a personalized cost of waiting analysis for your specific zip code, price range, and loan scenario — no obligation, just real numbers.

If you’re thinking about buying or refinancing a home anywhere in Washington state, or have questions about mortgages, let’s talk! I’m happy to help.

Rate information current as of 05/02/2026. This is not a commitment to lend. Your results may vary. Sources: MBS Highway, Optimal Blue, Fannie Mae, NWMLS.

Getting your offer accepted is one of the most exciting moments in the homebuying journey. It’s also when things start moving fast, and if you don’t know what’s coming, it can feel overwhelming.

This is the final class in my Homebuyer Workshop Series, and it’s the one that ties everything together. We’ve covered credit, down payments, mortgage qualifying, and loan programs — and now we walk through exactly what happens after a seller says yes, all the way to the moment you get your keys.

What We Cover in This Class

The closing process in Washington State is structured and predictable — once you know the steps. In this workshop, we go through each milestone in order:

• Before your offer: Why you should always contact your loan officer before submitting — a tailored pre-approval letter and a quick introduction to the listing agent can strengthen your position
• The closing timeline: What happens in those ~30 days between mutual acceptance and closing, and who’s doing what
• Your loan application and Loan Estimate: What triggers your formal application, what to review, and what to ask
• Escrow and earnest money: How the neutral third party protects both buyer and seller, and where your funds go
• Home inspection vs. appraisal: Two different purposes, two different people — and why both matter
• Title search and title insurance: How the title company confirms the seller has the legal right to sell, and what protects you
• Underwriting: The review process, the possible outcomes, and why a solid pre-approval makes all the difference
• The Do Not Do list: The financial moves that can derail a closing — even at the last minute
• The Closing Disclosure: Your final numbers, and how to compare them to your Loan Estimate
• Signing day, funding, and recording: What actually happens, and when you legally become a homeowner
• Your first week as a homeowner: Locks, utilities, addresses, and watching your equity grow

Previous Classes in This Series

If you missed the earlier workshops, they’re all available on demand at Homebuyer Workshop Series.

Ready to Get Started?

If you’re thinking about buying a home in Washington State and have questions — or you’re ready to get pre-approved — I’m happy to help. No obligation, just clear and honest information.

Get Pre-Approved at MortgagePorter.com

Rhonda Porter | The Mortgage Porter | Washington State Licensed Mortgage Advisor MLO#121324