2016 FHA Loan Requirements

2016 FHA Loan Requirements · First Time Home Buyer Florida · About Us

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FHA new updated guidelines an acceptable payment history if the Borrower has made all housing and installment debt payments on time for the previous 12 months and no more than two 30-day late mortgage or installment payments in the previous 24 months.

Deferred Obligations refer to liabilities that have been incurred but where payment is deferred or has not yet commenced, including accounts in forbearance.

The lender must include deferred obligations in the Borrower’s liabilities.

The lender must obtain written documentation of the deferral of the liability from the creditor and evidence of the outstanding balance and terms of the deferred liability. The lender must obtain evidence of the anticipated monthly payment obligation, if available.

The lender must use the actual monthly payment to be paid on a deferred liability, whenever available. If the actual monthly payment is not available for installment debt, the lender must utilize the terms of the debt or 5 percent of the outstanding balance to establish the monthly payment.

For a student loan, if the actual monthly payment is zero or is not available, the lender must utilize 2 percent of the outstanding balance to establish the monthly payment.

Credit score - On January 20, 2010 FHA announced a new policy to address risk. FHA changed the minimum credit score for new borrowers.

• 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%

This has allowed the FHA to better balance its risk and continue to provide financing for home buyers.

Debt-to-income ratio - FHA loan 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.

• Most lenders will limit maximum debt-to-income to under 50%
• FHA maximum debt to income ratio is 54.99%
• Manual underwriting maximum debt to income ratio is 43%
  

2016 FHA Loan Requirements

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Mortgage World Home Loans of New Jersey is a licensed residential mortgage broker in the state of Florida and will match you with the lender that will approve your FHA loan down to a 500 credit score.

We look forward to working with you.

2016 FHA Loan Requirements

We look forward to working with you.