Is it considered mortgage fraud if you manipulate income?

[Ellie Narie]

Let's say there's an unmarried couple with kids. Boyfriend has a business and is considered self employed, but he can't get a mortgage because he doesn't have two years of self employment income. So, he "hires" his girlfriend to "work" at his business, but she really doesn't so much if anything, he just gives her a paycheck. However, at first, the purpose of this paycheck wasn't to get a mortgage, hence, her paycheck is only like $1000. BUT, now they want to get a house, specifically a 2-4 unit owner occupied with FHA loan. So what the boyfriend does is he will take money out of his savings account and increase the girlfriend's income for just a month or two so she can qualify for a bigger loan, so that her paystub shows that she makes a lot. And then after she closes on the loan, he will reduce her income back to the 1000. Now, girlfriend has been going to college full time for the last two years, so it's not like mortgage brokers will care about two years of income, because she can substitute that with her full time college transcripts.

Would this scenario be considered mortgage fraud, where the boyfriend specifically increases girlfriend's income (even takes money out of his savings account to do so) for just a month or two so she could qualify for a bigger mortgage loan?