Per 4000.1:II.A.4.c

(C) Addressing Temporary Reduction in Income For Borrowers with a temporary reduction of income due to a short-term disability or similar temporary leave, the Mortgagee may consider the Borrower’s current income as Effective Income, if it can verify and document that:

the Borrower intends to return to work;
the Borrower has the right to return to work; and
the Borrower qualifies for the Mortgage taking into account any reduction of income due to the circumstance.

For Borrowers returning to work before or at the time of the first Mortgage Payment due date, the Mortgagee may use the Borrower’s pre-leave income.

For Borrowers returning to work after the first Mortgage Payment due date, the Mortgagee may use the Borrower’s current income plus available surplus liquid asset Reserves, above and beyond any required Reserves, as an income supplement up to the amount of the Borrower’s pre-leave income. The amount of the monthly income supplement is the total amount of surplus Reserves divided by the number of months between the first payment due date and the Borrower’s intended date of return to work.

Required Documentation

The Mortgagee must provide the following documentation for Borrowers on temporary leave:

a written statement from the Borrower confirming the Borrower’s intent to return to work, and the intended date of return;
documentation generated by current employer confirming the Borrower’s eligibility to return to current employer after temporary leave; and
documentation of sufficient liquid assets, in accordance with Sources of Funds, used to supplement the Borrower’s income through intended date of return to work with current employer.

Original question:
Hello. Can you please let us know what FHA's requirements are regarding maternity leave and when we are OK to qualify the borrower on their full income, rather than their leave income?