For a Fannie Mae loan, a borrower had a five-month employment gap during the most recent 12 months and has now worked seven months in a new position with a fixed annual salary of $78,000. What is the appropriate approach to assessing the resumed employment?
Correct Answer
A) Evaluate the gap and current employment, verify the fixed salary, and assess whether the employment is likely to continue
A. Analyze the current employment and verified income rather than ignoring or automatically rejecting the gap. The employment-gap guidance calls for careful analysis of current employment. Verified annual fixed salary is converted monthly by dividing by 12: $78,000 / 12 = $6,500, subject to the required documentation and consistency checks. Scope and exceptions: Fixed base income has no universal minimum receipt history under this provision; variable income has different requirements. The calculated amount is not approval or a substitute for verification. Source: Employment Gaps — https://guide-selling.fanniemae.com/sel/b3-3.2-02/standards-employment-related-income Fixed Base Income — https://selling-guide.fanniemae.com/sel/b3-3.3-01/base-income
Why This Is the Correct Answer
A. Analyze the current employment and verified income rather than ignoring or automatically rejecting the gap. The employment-gap guidance calls for careful analysis of current employment. Verified annual fixed salary is converted monthly by dividing by 12: $78,000 / 12 = $6,500, subject to the required documentation and consistency checks. Scope and exceptions: Fixed base income has no universal minimum receipt history under this provision; variable income has different requirements. The calculated amount is not approval or a substitute for verification.
Why the Other Options Are Wrong
Option B: Ignore the gap, because the current job already exceeds 6 months of history
Seven months does not remove the need for analysis.
Option C: Average the 2 years including the gap months at zero income earned
A two-year average including zero-income months is not the fixed-salary calculation.
Option D: Decline the file, since any gap over 30 days makes income unstable
A gap over 30 days does not automatically require rejection under this fixed-base rule.
Exam Tip
Apply the rules for the actual income type, not an invented universal gap cutoff.
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