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FHA LOAN - How do you qualify?

FHA LOAN - How do you qualify?

The first step to qualifying for an FHA loan is to work with a loan officer at an FHA approved lender. General guidelines that the loan officer will discuss with you for FHA loans include:

  • Documenting an employment history over the last two years. FHA guidelines consider the last two years of employment and look at a steady pay history or employment with the same employer.

  • Generally must have a valid social security number and be a resident of the US. There are exceptions for resident aliens, but these exceptions will vary by lender.

  • FHA loans require a minimum down payment of 3.5% when buying a home – but the down payment may be a gift under certain conditions.

  • The property will need to be inspected by an FHA appraiser and an FHA approved appraisal must be done.

  • Although there is some flexibility, the total monthly mortgage payment generally should not exceed 30-32% of your gross monthly income.

  • Your total debt should not be more than 43% of your gross monthly income. Again, there is some flexibility with this number, but this is a good guideline.

  • Minimum credit scores now apply with FHA loans and can vary by lender. A credit score of 580 and above requires a 3.5% down payment and a credit score of 500-579 requires a 10% down payment. Credit score requirements will vary by lender.

  • If you have had a bankruptcy that has been discharged, the waiting period is 2 years.

  • If you have had a foreclosure, the waiting period is 3 years and you must have good credit.

Contributor: BiggerPockets.com

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