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FHA Loan Requirements

What are the current requirements for FHA Loans?

FHA loan requirements are written to very straightforward and simple to follow. You will find some of the most useful information about today's FHA loan guidelines including income, credit and property requirements listed below.

To decide if you meet current FHA home Loan requirements for approval, lenders will look at:

  • Your monthly income and your current monthly expenses. Standard FHA loan requirement debt-to-income ratios are 31/43. These ratios may be exceeded with compensation factors.
  • Your credit history (standard FHA loan requirements for credit score are more flexible than other programs). A 620 FICO credit score is often required to obtain an FHA approval.
  • To determine if the home meets FHA requirements for loan approval, an appraisal must be performed by a certified FHA appraiser. Only the lending institution may initiate the order for an appraisal to determine that the subject property meets FHA loan inspection requirements.

FHA Debt to Income Ratio Requirements

Currently, FHA loans requirements state that your monthly housing costs (mortgage principal and interest, property taxes and insurance) must meet a specified percentage of your gross monthly income (31% ratio). You must also have enough income to pay your housing costs plus all additional monthly debt (43% ratio). These percentages may be exceeded with compensating factors.

FHA Loan Credit Score Requirements

Your credit background will be fairly considered. While the official FHA loan requirements for credit score states that the minimum FICO score for FHA loans is 580 for LTV ratios over 90 percent and 500 for LTV ratios below 90 percent, most lenders today will not approve mortgage loans to borrowers with credit scores below 620. It is possible for a borrower to be approved for an FHA Loan after bankruptcy, provided that the bankruptcy is at least two years out of discharge if Chapter 7 or one year out of discharge if Chapter 13 and all court ordered payments have been made on time.

FHA Loan Appraisal Requirements

For the subject property to be eligible for FHA loan approval, it must first be appraised by a certified FHA appraiser. FHA loan property requirements for appraisals state that the home must be in fairly good condition. Things that could disqualify the subject property include a leaky roof, structural problems and/or damage, missing siding or paint and other issues. The appraiser must determine if the appraised value of the home meets or exceeds the maximum Loan-to-Value requirements for FHA mortgage loans. If the appraised value comes in below those requirements, the borrower could have to bring more money to the closing table.

Additional requirements for FHA Loans

Additionally, to meet current FHA loan eligibility requirements you must:

  • Have a valid US Social Security Number (SSN)
  • Be a legal U.S. resident
  • Be at or above the legal age to sign on a mortgage per state law. There is no maximum age limit for a borrower.

Even if you are not a U.S. citizen, you must have a valid Social Security Number (SSN). A Tax ID number (ITIN) does not qualify as an acceptable substitute for a SSN.

FHA Loan Limits and Down Payment Requirements

The maximum loan amount under today's FHA loan requirements is determined by:

The maximum FHA loan amount: FHA approved lending institutions can not insure loans higher than the specified amounts listed for the metropolitan area or county where the property is located. The highest maximum FHA mortgage right now is $729,750. The lowest FHA maximum mortgage loan amount in any area is $271,050. To see what the limit is in the county in which you're interested, visit the following site https://entp.hud.gov/idapp/html/hicostlook.cfm. This site lists U.S. territories as well as states.

Maximum FHA Financing: Depending on the state where the property is located, FHA Loan Requirements state that the maximum Loan-to-Value financing will be 96.5% of the lower of the purchase price or the appraised value of a home being purchased or 97.75% of the lower of the appraised value of the home or the amount you are refinancing plus closing costs of a home being refinanced. If you are refinancing and taking cash out, the loan will be limited to 85% of the appraised value.

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 Why choose an FHA Loan?

  • FHA loan down payment requirements require only 3.5% of the purchase price.
  • Non-occupant, co-borrower are permitted by FHA Loan Requirements.
  • Requirements for FHA mortgage loan approval use flexible qualifying ratios.
  • There are no pre-payment penalty requirement for an FHA Housing Loan.
  • FHA Insured Loans carry low fixed interest rates.
  • FHA Loan Guidelines have lower MI premiums.
  • An FHA Loan Program is eligible for non-credit qualifying, streamline refinance.
  • A HUD FHA Loan is available everywhere in the U.S. if there is a market for housing and the property HUD's minimum property standards and the price is below the Maximum FHA Loan amount for that area.
  • You can get an FHA Loan to purchase or refinance a new or existing one to four family home in urban and rural areas.
  • FHA Fixed-Rate Loans are offered at terms of 15 or 30 years.



 FHA Loan FAQ'S

What is an FHA Loan?
A Federal Housing Administration loan provides low-cost insured home mortgage loans that suit a variety of purchasing and refinancing options.

What are FHA Loan Limits?
The maximum FHA Loan Limits are determined by the county or metropolitan area where the home is located.

How can I qualify for an FHA Loan?
It is important to research the FHA Loans Information and contact a lender to see if you qualify for today's FHA Loan Insurance guidelines. All FHA Loan Credit Score and FHA Loan Income guidelines must be met.

What are current FHA Loan Fees?
The FHA has a list of allowed fees that can be charged to the borrower on FHA Loans. These fees are referred to as allowable closing costs, and can vary from lender to lender. The FHA Loan MIP (Mortgage Insurance Premium) amounts to 1.75% of the loan amount and in usually financed in the mortgage.

Do FHA Loans have Mortgage Insurance?
FHA Loans have Monthly Mortgage Insurance on loans with a term of greater than 15 years and a loan-to-value ratio of 90% or greater (meaning you are borrowing more than 90% of the value of the home). Mortgage Insurance (MI) for FHA loans is not considered FHA Loan PMI, because it's not offered by a private company. When comparing the monthly mortgage insurance rates for FHA Loans vs Conventional Loans PMI, the FHA MI Rates are usually better.



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