How Will Maternity Leave Affect Your Mortgage Application?

You’ve decided that the bundle of joy you’re carrying deserves his or her own room. You’ve even decorated the space in your mind. The only problem is finding a bigger home, either before the baby arrives or with a mortgage while on maternity leave.

Applying for a loan while on maternity leave doesn’t set off as many red flags as it used to. Lenders believed that most people didn’t return to their jobs after spending time with the new little one. Now, this situation doesn’t garner you an automatic decline, but you may have to provide some additional documents.

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How lenders verify income for a mortgage while on maternity leave

According to the American Pregnancy Association, maternity leave is usually a combination of other benefits your employer provides. These include sick leave, vacation, holiday pay, personal days, short-term disability and unpaid family leave time.

Access to paid family and medical leave is not universal. In March 2026, 49% of private industry workers had it, according to the Bureau of Labor Statistics.

Still, income qualification is virtually the same for those on maternity leave and any other borrower, explains Eric Jeanette. Jeanette owns Dream Home Financing and FHA Lenders.

“You provide the pay stubs, W2s and tax returns for the dates requested,” he says.

If, however, most of your leave is unpaid, you may need a letter of explanation from your employer. It should detail when payments will resume. This likely differs from one lender to the next, says Jeanette. It can vary with the underwriter managing the file and how strong other compensating factors are, like cash reserves.

Timing matters under Fannie Mae’s temporary leave income rules. If you return to work by the first payment date, the lender can use your regular income. Otherwise it uses the lesser of your leave income or your regular income, and the lender must have no sign that your employer will not take you back.

Lenders might request another document: a letter from the borrower specifying her intention to return to work. Then the employer might have to verify the date and explain the borrower’s right to return to work after her leave. The underwriter will also want to know if she will return to her original position at the same rate of pay.

Alternatives to meeting the income requirements

Unfortunately, only 49% of private industry workers had access to paid family and medical leave in March 2026. Many employers don’t offer cash benefits to female workers on maternity leave. Your income may no longer meet the requirements for the mortgage while on maternity leave. In that case, you’ll need to look at alternate ways to boost your household income.

If you have the resources, make a bigger down payment, and if not, Jeanette suggests finding a cheaper home. Shopping around until you’re sure you’ve found the house you want is a good idea anyway. You’re going to live there for a significant period of time, so you want to be happy.

Adding a co-borrower who can bring more income to the table can help you buy a home, too, says Jeanette. The lender will then use that person’s income and credit history when qualifying you for the loan. But that person should know he is also responsible for repaying the loan if you can’t for some reason.

Pay down some of your consumer debt like credit cards or whatever has the highest monthly payment requirements, Jeanette advises. That changes your Debt-to-Income Ratio (DTI) and may drop it enough for you to qualify for the mortgage.

The last suggestion from Jeanette is to find a home with lower property taxes. That’s often a factor that eats into the DTI.

Maybe you’re thinking, you’ll not tell the lender that you’re trying to get a mortgage while on maternity leave.

Check your home buying eligibility. Start here (Nov 5th, 2026)

Do I have to tell my lender I’m pregnant?

“Lenders are not permitted to ask whether a borrower is pregnant and if they are, can’t use that against them,” says Jeanette. “But lenders will call the employer to verify employment and income.”

That may be the time when the lender discovers you’re on maternity leave. Or if you meet the lender in person while visibly pregnant, he will assume a maternity leave is in your future.

Be totally upfront when you apply for a loan, and let the lender know when you plan to take time off. They’ll find out anyway and that will save time and headaches for all of you.

Fair lending rules for a mortgage while on maternity leave

The Federal Fair Housing Act, enacted in 1968, says it’s unlawful to discriminate in real estate transactions. It specifically bars discrimination in the sale, rental, and financing of housing. The protected traits are race, color, religion, national origin, sex, familial status and disability. The Act defines familial status to include a person who is pregnant, and pregnancy falls under sex as well.

Separately, the Equal Credit Opportunity Act and Regulation B cover credit discrimination. They bar bias based on sex and marital status. Neither lists familial status. Regulation B, however, bars lenders from assuming a borrower’s income will drop because she may have or raise children. So, a lender can’t deny or even delay a loan because the applicant is expecting or on leave. Some lenders say the person in question must return to work before they can approve the loan. HUD has taken fair housing action against that practice.

Denying a loan on the assumption a woman won’t return to work after maternity leave can violate the Fair Housing Act. HUD treats it as sex and familial status discrimination. Maternity leave counts as a temporary leave, which means the woman still has her job.

When lenders deny a mortgage over maternity leave

When one of the parties is on maternity leave, mortgage companies often believe household income will fall for an extended period. That’s how lenders make mistakes.

A couple in Santa Ana, California, filed a complaint with HUD against Pasadena-based Wescom Central Credit Union. They alleged it unjustly refused to approve their mortgage loan because the woman was on maternity leave. They said the lender asked her to return to work and supply a current pay stub before it would approve the loan.

In May 2017, the U.S. Department of Housing and Urban Development (HUD) announced an agreement resolving the complaint. It set terms Wescom must follow. Those include refinancing the couple’s current mortgage at a lower rate and providing fair lending training to its employees. In addition, Wescom had to create a $50,000 fund for applicants in similar situations. The fund covers 2015 applicants Wescom denied loans and those who withdrew their applications.

In another case, a doctor applied for a mortgage with Cornerstone Mortgage. According to HUD’s complaint, the lender then learned she was on maternity leave. It told her it could not count her income during the leave. HUD alleged that Cornerstone initially denied her the loan even though her leave was paid and she planned to return to work. Under a 2011 settlement with HUD, Cornerstone agreed to pay her $15,000. The settlement set up a $750,000 fund for other borrowers who faced discrimination because they were on pregnancy or maternity leave.

Filing a fair housing complaint with HUD

You may feel a lender discriminated against you because you tried to get a mortgage while on maternity leave. Or you may want to be ready in case one does. Either way, you can file a claim with HUD, and they will investigate it at no charge. Always keep in mind that maternity leave by itself is no cause to deny or delay finalizing a mortgage loan.

Finding a loan professional for your questions

Expectant mothers, or those planning to be soon, may have questions this guide doesn’t cover. If so, find a knowledgeable, experienced, trustworthy mortgage loan professional to answer them. How to comparison shop for a mortgage lender will give you some ideas on how to find this kind of person.

Check your home buying eligibility. Start here (Nov 5th, 2026)