What Do You Need to Qualify for an FHA Loan?

Published by julia | Filed under Buyer / Seller Tips, Listings, Miscellaneous, Real Estate, Shout Outs

An FHA loan is a government backed loan provided by the Federal Housing Authority. The program was started back in 1934 to make it easier for people who do not have the money for a large down payment to qualify for a mortgage. Also, the qualifications for getting an FHA loan are less stringent than with other loan companies, because the loan is backed by the surety of the federal government. If you are interested in getting an FHA loan to buy your house, here is what you need to qualify for one.

First of all, you will need to have two years of steady income. If you have been employed for those two years, preferably with the same employer, then that’s even better. If not, then some type of stable income will need to be seen. You should also minimize the number of late payments you have had with your creditors for the past two years, as too many could disqualify you for the FHA loan. You will also need a credit score of at least 620.

You can not have gone through bankruptcy in the past two years and should have maintained a good credit record since then. If you have had a foreclosed property, you will need to wait at least 3 years before applying for an FHA loan, and maintain good credit during the three years you are waiting. Finally, you will need to provide a down payment of approximately 3.5% of the purchase price of the home. This is far less than the 10 to 20 percent that most home lenders want you to pay.

One thing that is important to remember is that you will go through a regular lender to get your FHA loan. However, since FHA requirements are looser than some other loans, you could qualify for an FHA loan with one lender while not qualifying for a regular loan with the same lender. If you still do not qualify for an FHA mortgage, you will be told why, and you can work on improving your credit record so that you can qualify for one the next time you apply.