FHA loan requirements - The FHA program was created as part of the National Housing Act on June 28, 1934. FHA was created to help stimulate the housing market making loans more accessible and more affordable. The FHA program was created as a result of The Great Depression to help anyone including families, the elderly, people on disability and lower-income families be able to buy a home.
After the financial crisis of 2008 all the major banks raised their credit standards for approving FHA loans. Because the banks make the rules for loans they will approve, they may require a minimum credit score of 640 for their loans. These guidelines are the bank's guidelines.
After the COVID-19 pandemic of 2020 all the major banks raised their credit standards for approving FHA loans. Because the banks make the rules for the loans they will approve, they may require a higher credit score for their FHA loans. These requirements are the bank's guidelines.
Credit score - On January 20, 2010 FHA announced a new policy to address risk. FHA changed the minimum credit score for new borrowers.
This has allowed the FHA to better balance its risk and continue to provide financing for home buyers.
Refinance - Need to lower your monthly payment today for a better tomorrow. Start your refinance online now!
Debt-to-income ratio - April 1, 2013 FHA requirements include a maximum debt to income ratio. When a borrower applies for an FHA mortgage, they are required to disclose all debts, open lines of credit, and all possible approved sources of regular income. Using this data, the lender and FHA can calculate the borrower's debt-to-income ratio.
Charge off accounts - Collection accounts - Judgments
Mortgage Insurance - On January 9, 2015 the Federal Housing Administration (FHA) announced the reduction of it's annual Mortgage Insurance Premium (MIP) rates.
Effective on or after January 26, 2015 FHA will reduce the premium from 1.35% to .85% a reduction of .5%.
Combined with low interest rates and the reduction of MIP rates means that it is a great time to buy a home or refinance your mortgage.
First Time Home Buyer - FHA Refinance
Closing cost - FHA allows the seller to pay up to 6% of your closing cost. FHA loan requirements.
If you are buying a $100,000.00 house FHA allows the seller to pay up to $6,000.00 for your closing cost. It must be in writing in the sales contract, "Seller will pay up to 6% of buyer's closing cost."
If you do not write it into the sales contract then you will be paying the closing cost. In the state of Florida closing cost for a $100,000.00 house average around $4,800.00 depending on taxes, insurance and who's paying the transfer tax and owner's title insurance.
By allowing the seller to pay for your closing cost you will decrease
the amount of money required to buy a home. Buying a
$100,000.00 property requires $3,500.00 down payment and if the seller
pays up to $6,000.00 for your closing cost you will only need around
$4,000.00 to buy a $100,000.00.
Are you a first time home buyer? Do you need to get pre-approved for a first time home buyer program? Apply now!
KEYWORDS:FHA Loan Requirements,
www.MORTGAGE-WORLD.com LLC is an online mortgage company specializing in FHA loans for first time home buyers.
Call us 888-958-5382
www.MORTGAGE-WORLD.com LLC is an online mortgage company specializing in FHA loans for first time home buyers.
We look forward to working with you.
* FHA requirements new borrowers will now be required to have a minimum credit score of 580 to qualify for 3.5% down payment
* FHA loan requirements new borrowers with less than a 580 credit score will be required to put down at least 10%
FHA Credit Score
Requires a minimum credit score of 500 to buy a home or refinance
Collection accounts
A collection is minor in nature usually does not need to be paid off as a condition for loan approval
Bankruptcy
Chapter 7 Bankruptcy at least two years must have elapsed since the discharge date
Foreclosure
Foreclosure must have been resolved for at least 3 years
Short Sale
FHA guidelines requires three year past from the date of sale of the property
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