Ashley, Member

An FHA loan is one of the easiest types of mortgage loans to qualify for because it requires a low down payment and you don’t have to have perfect credit, but a down payment of 3.5% is required. There are several other things to take into consideration when applying for an FHA loan. Some of the most basic requirements for an FHA loan are the following:

  • Two years of steady employment (preferably with same employer).
  • Last two years' income should be the same or increasing.
  • Credit report should have less than two thirty day "lates" in the last two years, with a minimum credit score of 620 or higher (in some cases no credit score at all).
  • Bankruptcies/foreclosures should be at least two years old, with perfect credit since discharge.
  • Your new mortgage payment should be approximately 30% of your gross income (before taxes).

The FHA recommends a consumer credit counseling program for anyone who thinks there is a possibility of being denied a loan because of their credit. The FHA will ask for a ton of information consisting of the following: every address you’ve lived at within the past two years, the address(es) of your employer(s) for the last...

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Lisa Foreman, Member

Before talking about who can get an FHA loan, it is important to clarify what one is because a lot of people aren’t quite sure. (Doing so will also help make clear who qualifies). FHA loans are mortgages backed by the Federal Housing Administration and issued by FHA-approved mortgage lenders that can be used to purchase or refinance new or existing 1-4 unit homes. The federal government backs, or insures, these loans in order to lower the down payment requirements, interest rates, and fees that would otherwise serve as built-in risk protection for lenders. In other words, it’s a way for the federal government to encourage lending to first-time home buyers who might have affordability concerns.

Now that you have a general sense of what FHA loans are and who they’re for, there are certain qualification criteria about which you should be aware.

• Borrowers with credit scores equal to or greater than 580 are eligible for maximum financing and therefore may be able to place down payments as low as 3.5%
• Borrowers with credit scores between 500 and 579 are eligible for a maximum of 90% financing, which means they will have to place a down payment of...

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Your Answer
Other ways to ask the same question:
  • – Who qualifies for an FHA loan?
  • – Who can get an FHA loan?