Applying for a home loan while on maternity leave: A guide

Sometimes, two major life events happen at the same time. If you’ve just become a parent and are taking some time off from work, you may decide you need some more space for the new addition to your family. Buying a home while you’re on maternity leave is possible, but getting a mortgage will require some extra steps and documentation.

Like with any home loan, your lender will need to confirm that you can afford your mortgage payments, even while on leave. Before you apply for a mortgage while on maternity leave, it’s important to know your legal rights, the documentation you’ll be need for your lender, and how your borrowing power will be affected.

Can you get a home loan while on maternity leave?

Yes, you can get approved for a home loan while on maternity leave. The same is true for paternity leave. Federal lending laws prohibit lenders from discriminating against any borrower because they are on parental leave.

To help ensure everyone has a right to equal opportunity housing, the Fair Housing Act and subsequent piece of legislation state that a borrower cannot be discriminated against for the following characteristics:

• Race
• Creed
• Color
• National origin
• Sexual orientation
• Military status
• Age
• Gender
• Marital status
• Disability
• Religion
• Familial status

The U.S. Department of Housing and Urban Development is responsible for enforcing these fair lending laws. However, your lender will still need to assess your finances to confirm you can afford to make your mortgage payments even while you’re on leave.  

Paid family leave is not mandated by the federal government and is not offered by all employers. According to the U.S. Department of Labor, as of March 2023 only 27% of U.S. workers have access to paid family leave through their employer.

If your employer offers paid leave - either partial or full salary - you’ll want to convey that to your lender. If not, you can boost your case by showing you can keep up with your mortgage payments with savings or your partner’s income. You’ll also need to let your employer know when you’re planning to return to work.

Documents you’ll need to apply for a mortgage while on maternity leave

If you’re buying a house while you’re on maternity leave, you can expect your lender to ask you to provide the following documents:

• A letter from your employer verifying your job, pre-leave salary, and return-to-work date
• Proof of any paid leave income
• A letter from you that confirms your return date

You’ll also need all the documents any borrower would need to prove they can afford to repay the home loan:

• Pay stubs and bank statements for the last 2 months before leave
• Tax returns for the last 2 years
• W-2s for the last 2 years
• Savings and retirement account statements
• Proof of any additional income
• Recent loan statements
• 1099 forms (for independent contractors)
• Profit-and-loss statements (for business owners)

How much can you borrow for a mortgage when on maternity leave?

The amount of money you can borrow for a home loan while on maternity leave will depend largely on:

• Your non-leave income
• Whether your leave is fully paid, partially paid, or unpaid
• Your credit score
• Your lender

Whether your leave is fully paid, partially paid, or unpaid can affect your borrowing power. If your leave is unpaid or only partially paid, you may not be able to borrow as much as you would when you’re working full-time. It’s possible you may even not get approved for a property you could otherwise afford.

This is where having a good credit score, some savings, and a co-borrower earning income can be helpful. If you can show your lender that you still have a reliable and continuous income source, it can increase your odds of approval.

If your leave is fully paid, your borrowing power won’t be as impacted. Having a good credit score can still boost your chance of getting approved and help you get a lower interest rate.

Tips for getting approved for a home loan while on maternity leave

Here are a few steps you can take to increase your chances of getting approved:

• Minimize your debt: The best way to boost your odds of getting approved is by improving your financial situation. Paying down as much debt as possible will show your lender you have the money to put toward a mortgage.
• Increase your savings: Your lender will likely understand that going on maternity leave is temporary. Having a considerable amount as a savings buffer can increase your lender’s confidence in your ability to make payments.
• Find the right lender: Working with the right lender can make all the difference. Compare lenders like you would if you weren’t on maternity leave. Also, look for someone willing to work with your situation.

Are you required to tell your lender you’re pregnant?

Borrowers are not required to disclose pregnancy status or any future pregnancy plans when you apply for a mortgage. Lenders aren’t allowed to ask you if you’re pregnant or on parental leave, and legally they can’t deny you a mortgage just because you’re pregnant.

However, lenders will verify your income. If you’re on a limited income for maternity leave, this could affect your ability to qualify for a mortgage and/or the amount you can borrow.

FAQ about getting a loan while on parental leave

Here are the answers to some more frequently asked questions about getting a mortgage and buying a home while on parental leave.

How does FMLA differ from parental leave?

The Family and Medical Leave Act (FMLA) is a federal law that provides eligible workers with up to 12 weeks of unpaid, job-protected leave for certain family and medical reasons. These reasons include childbirth, adoption, foster care placement, and time to bond with the child. Parental leave is time off given by your employer for you to care for and bond with a child after birth. Parental leave can be paid, depending on your employer and state.

Does being on FMLA affect getting a mortgage?

Unpaid FMLA leave can impact loan approval since lenders must verify you have the money to cover your mortgage payments.

How do I survive financially during maternity leave?

Some employers offer partial or fully paid maternity leave. Families without access to paid parental leave often rely on savings, paid time off, short-term disability, and budgeting to cover their expenses during this time.

The bottom line: You can qualify for a mortgage while on maternity leave 

Buying a house while pregnant is possible, though you may already have your hands full. For some, the time off allows an opportunity to focus on family and closing on their new home. Your ability to get approved for a mortgage and purchasing power will depend on whether your leave is paid, your credit score, your savings, and whether you have a co-borrower.

Are you ready to plant some roots and purchase a home of your own? Take action and start your mortgage application online today with Rocket Mortgage^®.