The Federal Housing Administration (FHA), an agency of the federal government, insures private loans that are issued for new and existing housing, and loans that are approved for home repairs. Whether you’re a first time homebuyer, moving to a new home, or want to refinance your existing conventional or FHA mortgage, the FHA loan program will let you purchase a home with a low down payment and flexible guidelines.
The FHA loan requirement guidelines are the most flexible of all mortgage loans on the market today. You do not have to be a first time buyer to obtain a FHA loan.
Basic FHA Loan Requirements:
- Two Years of uninterrupted employment (preferably with the same employer.)
- Income for the past two years should be steady or increasing.
- Credit report should typically have less than two thirty day lates in last two years with a minimum credit score of 580 or higher or in some cases no credit score at all.
- Bankruptcies must be at least two years old, with no negative credit hits since discharge.
- Foreclosures must be at least three years old, with no 30 day past dues on credit report.
- Your new monthly housing and personal expense ratio (mortgage payment, taxes, insurance and association dues plus all other monthly debt obligations) should be 55% or less of your gross monthly income.
These are some of the most basic of FHA loan requirements for qualifying for a FHA loan. If you have answered yes to most of these statements, you may qualify for a FHA mortgage loan.
Some highlights of the FHA loan program are:
• Minimal Down Payment and Closing Costs.
- Downpayments as low as 3.5% of the purchase price.
- 100% financing options available
- Gift for downpayment and closing costs allowed.
- No reserves are required.
- Seller can credit up to 6% of sales price towards buyers costs.
FHA Single Family Home Loan guidelines include:
- FHA Single Family Home Loan program is for owner occupied properties, you must intend on using the property as your primary residence.
- These loans can be used for a new home purchase or a refinance of an existing primary residence.
- Allowable Property Types are as follows:
- Single Family Real Estate Homes (SFR)
- Condo’s – (approved condominium complexes less than 4 stories)*
- PUD’s – (Public Urban Developments)
- 2-4 unit housing complex
- There is no maximum sales price but there is a maximum loan amount for this type of property.
- You may own other rental property that is not financed by FHA and still use a FHA loan to purchase a primary residence.
- Condominiums must be in HUD approved projects.
- The FHA Single Family Home Loan allows borrowers to finance up to 96.5% of the value or purchase price of the property. The FHA maximum loan amounts depend upon the State and county that the property is located in.There are numerous other FHA mortgage programs available today, contact us directly for more information on which FHA programs could fit your needs.