FAQ: How are Employment Gap Days Counted?

Q: What is an employment gap in Charlie?

A: An employment gap refers to any period between the end date of one employment entry and the start date of the next. Charlie identifies these gaps and flags them based on loan-specific thresholds. If the gap meets or exceeds the threshold for the loan type, Charlie displays the number of gap days.

Q: How does Charlie calculate the number of employment gap days?

Charlie uses this process:

1. Identifies the end date of a previous employment and the start date of the next.

2. Calculates the gap duration in days.

3. Compares the gap duration to the employment gap threshold, which varies based on the loan type and, in some cases, the Automated Underwriting System (AUS) recommendation.

4. If the gap duration equals or exceeds the threshold, the gap is flagged and the number of days displayed.

Q: What are the employment gap thresholds for different loan types?

Charlie applies the following logic to determine the employment gap threshold:

• Conventional Loans:

  • 29 days

• USDA Loans:

  • 29 days

• FHA Loans:

  • 179 days

• VA Loans:

  • If AUS recommendation is NOT "Approve Eligible" or "Approve Ineligible":

    • 29 days

  • If AUS recommendation is either "Approve Eligible" or "Approve Ineligible":

    • 59 days

Q: Can I adjust the employment gap days manually?

No, employment gap days are calculated automatically based on the start and end dates of employment entries. To adjust the gap:

• Click EDIT on any employment entry.

• Change the dates as needed.

• Click SAVE to update.

Charlie recalculates the gap duration based on the updated dates.

Q: Why do gap thresholds vary by loan type and AUS recommendation?

Loan programs have different underwriting guidelines for employment continuity:

• Conventional & USDA:

  • Stricter guidelines with a 29-day threshold.

• FHA:

  • More flexible with a 179-day threshold.

• VA:

  • The threshold is dynamic:

    • 29 days for most cases.

    • 59 days if the AUS recommendation is "Approve Eligible" or "Approve Ineligible" to allow greater flexibility.

This ensures Charlie’s calculations align with industry standards and program-specific requirements.