2016 FHA loan

2016 FHA loan

FHA loans have been helping people become homeowners since 1934. A perfect credit score is not needed for an FHA loan approval. In fact, even if you have had credit problems, such as a bankruptcy, it's easier for you to get an FHA loan than a conventional loan.

On January 20, 2010 FHA announced a set of policy changes to strengthen the FHA. The changes announced are the latest in a series of changes enacted in order to better position the FHA to manage its risk while continuing to support the nation’s housing market recovery.

FHA requires a minimum credit score of 500. There are no income limits like you may find with first time home buyer programs. However, there are limits on how much you can borrow.

• 203(b) FHA purchase program provides mortgages for home buyers  to purchase a principal residence with a low down payment and with lower credit standards.
  
• 203(k) FHA purchase program is for the rehabilitation and repair of single family properties. Providing both the financing to purchase a property and the financing to make repair. The program offers an important tool for expanding home ownership opportunities.
• HUD homes for sale program for borrowers purchasing single-family HUD Real Estate Owned (REO). The program is limited to owner-occupant buyers who have not purchased a HUD REO property within the last 24 months.
• Lease with option to buy mortgage. Lease with option to buy allows a renter to buy the property they are renting. A lease option mortgage allows for sellers credit.
  
• Gift of equity mortgage loan. A gift of equity is a transfer of ownership of a property to a family member or someone. Gift of equity down payment and gift funds requirements.

2016 FHA loan requirements

No Credit History

Three lines of credit are necessary to apply for an FHA loan. However, in the event a borrower does not have sufficient credit on their credit report the FHA will allow substitute forms. FHA allows minimum trade lines if you have credit scores.

Late Payments

During an underwriter analysis of borrower credit, the overall pattern of credit behavior is being reviewed rather than isolated cases of slow payments. If a good payment pattern has been maintained, regardless of a specific period of financial difficulty preceded it, the borrower may escape disqualification.

Collection, Judgments, Federal Debts

A collection is minor in nature usually does not need to be paid off as a condition for loan approval. It is stated as such in FHA guidelines. Any judgments will have to be paid in full prior to closing. Borrowers who are delinquent on any federal debt, such as tax liens, student loans, etc., are not eligible.

Chapter 7 Bankruptcy

At least two years must have elapsed since the discharge date of the borrower and / or spouse's Chapter 7 Bankruptcy, according to FHA guidelines. This is not to be confused with the bankruptcy filing date. A full explanation will be required with the loan application. In order to qualify for an FHA loan, the borrower must qualify financially, have re-established good credit, and have a stable job.

2016 FHA loan

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