Long Island Mortgages for Union Members

Getting a mortgage as a union member on Long Island comes down to how your pay gets counted. Hall work can mean several W-2s in one year, then a winter on unemployment. Other union jobs bring overtime and step raises. Lenders have rules for all of it, whether you’re buying or refinancing in Nassau or Suffolk.

Not in the trades? Railroad, utility and other union workers, start with the overtime and step-raise sections.

Teacher, nurse, police officer or firefighter? I have separate pages for teachers, nurses and police, firefighters and EMTs.

Can you get a mortgage working out of a union hall?

Yes. If you’re an electrician, carpenter, laborer or other tradesperson working out of the hall, you can end up with W-2s from several contractors in one year. That’s fine as long as your pay stays steady. FHA’s rules even name union trades as a field where frequent employer changes are expected.

VA wants last year’s earnings and a verification from your current contractor.

Send me every W-2 from the last two years, even the small ones. Paid on a 1099 instead? See my self-employed mortgage guide.

Buying before your next job starts? A narrow conventional option lets the union supply the signed offer. It only works on a one-unit home you’ll live in, with a job starting within 90 days after closing, a set salary or set minimum hours, and extra savings. If your hours change week to week, it won’t fit.

Seasonal work, winter layoffs and unemployment

Seasonal pay needs a two-year track record. On a conventional loan, the lender averages this year’s pay so far with the last two years. FHA counts it if you’ve done the same kind of work for two years and you’re likely to be called back next season.

Unemployment from seasonal layoffs can count too, on a conventional or FHA loan, if you’ve collected it for two years and it’s expected again. On a conventional loan it also has to show on your last two tax returns.

VA is different. VA’s own rule calls unemployment temporary income, so if you’re going VA, ask me before you count on it.

Keep your 1099-Gs. They’re your proof.

Apprentice step raises and hourly pay

Apprentices move up a step at a time until they top out at full scale. If your job has a step schedule, each step is a raise too.

Paid by the hour, and your hours change? On a conventional loan, you need at least 12 months of history. The lender can multiply your average hours by your current rate, so a step you already got counts in full. A raise that hasn’t started yet doesn’t count. FHA usually averages your last two years.

Say you’ve averaged 150 hours a month over the last year and just moved up from $40 to $44 an hour. In that example, the lender can count 150 hours at $44, or $6,600 a month, not $6,000 at the old rate.

On salary? A raise that starts within 60 days after closing can count on a conventional purchase, or on a refinance that isn’t a cash-out, if your employer puts the terms in writing.

How lenders count overtime

Overtime counts, but lenders want a track record, usually two years. If it’s been steady or going up, they average it. If it dropped, the lender has to see it level off first, then counts only the lower, newer amount.

Less than two years? A conventional loan can work with 12 months or more if the rest of your file is strong. FHA can work with one steady year, and it uses whichever is lower: your two-year average or your last year. VA generally wants two years.

Union dues and your debt-to-income ratio

Dues come out of every check, but on conventional and FHA loans they don’t count against you. Lenders compare your debts to your pay before taxes and deductions, and dues aren’t a debt. Neither are Social Security and Medicare taxes or 401(k) contributions.

Your union annuity fund, 401(k) and pension

If you have an annuity fund on top of a pension, your plan’s rules decide whether it helps. The test is simple: can you get to the money while you’re still working? On a conventional loan:

• Down payment and closing costs. Vested 401(k), IRA and similar money counts if the plan lets you take it out while you’re still working.
• Savings left after closing (reserves). The vested balance counts, and you don’t have to cash it out. Money you can only get when you retire or leave the job doesn’t.
• Borrowing from the fund. If your plan allows a loan, it can cover the down payment, and the payment doesn’t have to count as a debt. If that account is also your reserves, the loan comes off it.

FHA usually counts up to 60% of a retirement account, less any loans against it.

Not every plan allows hardship withdrawals, so call your fund office and ask. Public employee, but not a teacher? If you’re in the state retirement system (NYSLRS), you may be able to borrow against your own contributions.

Strikes, gaps and a layoff before closing

If you’ve been on strike, plan on that time being treated like any other gap. A lender averaging your pay can leave out some one-time events outside your control, but the rules don’t name strikes.

Lenders look harder at any gap in the last 12 months. On FHA, if you were out six months or more, your current pay can count once you’ve been back in your line of work for six months. You also need two years of work before the gap. VA wants any time out of work explained.

Right before closing, the lender checks again that you still have the job. On a conventional loan that’s within 10 business days of closing, so a layoff in those last two weeks can stop the loan. Moving to lower pay, like a new job? The lender has to use the lower amount. If you know something’s coming, tell me before we set a closing date.

Conventional, FHA or VA: which loan fits

Your union card doesn’t pick the loan. Your pay history, credit and savings do. With solid credit and some savings, conventional is usually the place to start. FHA has a lower minimum credit score than most conventional loans, so it can help if a slow year hurt your credit. If you served, look at VA too.

Got a housing benefit through your union or your job? Tell me before we pick the loan. FHA allows a gift from your employer or your union. A conventional loan can take a grant from your employer, but its gift rules are written for family, not unions. My down payment assistance page has more.

I compare loans from the lenders I work with, and you pick the one that fits. More on conventional, FHA and VA loans, buying a home and refinancing.

Documents you’ll want

My mortgage document checklist is already set up for W-2 pay, so you can print it and check things off. Union members should add:

• W-2s for the last two years from every contractor or employer.
• Your 1099-Gs and two years of signed tax returns, if you collect seasonal unemployment.
• Proof of your new hourly rate, if you just moved up a step.
• Your annuity fund, 401(k) or pension statement, plus the plan’s withdrawal and loan rules.

Not sure what applies? Text me at 631-250-6930 with how you’re paid, or use my contact page.

Frequently asked questions