Qualifying for FHA loan with 1099 income vs. W-2 income

[Garrett Tierney]

Hello BP Community, I am currently working on wrapping up a refinance on my first investment property. I was able to purchase the 4-unit foreclosure by utilizing an FHA 203k loan for purchase of $170k, plus $85k renovation. In order to find and purchase another multi-unit property by utilizing FHA financing, I am refinancing into a conventional loan. Once the refinance is complete, I am setting up for a career change which would change my income position from solely W-2 earnings to solely 1099 earnings.

My questions is this: If I do not maintain my W2 income, and make a career change to become self-employed prior to my next FHA purchase, will I have likely created a scenario for myself in which getting another FHA loan on a multi-unit would become significantly more difficult? From researching this topic, I am optimistic that clear financial records documenting the history of each type of income will still make me a suitable candidate for this source of financing. I have nearly 3 years of continuous W2 earnings from a very stable, well-paying job.

If anyone has experience making this transition and still being approved for FHA financing, or experience underwriting any similar cases, your feedback is greatly appreciated and I thank you in advance for seeking to help out others in the community. Thanks!