Some Info About FHA Loan Guidelines
Here is some information about FHA loan guidelines. Many people believe these loans can be hard to get, but it’s much easier than obtaining one of the conventional loans today. HUD (dept. of housing & urban development) has their own government program designed to help Americans get qualified for home loans. During our recent economic crisis the FHA requirements are more lax than ever before.
Income Requirements – There are actually no minimums on income requirements when applying for these loans, but you need to be able to show a steady incomes over the past 3 years.
FHA loan guidelines take into consideration your income from seasonal jobs, as well as child support, pensions, and retirement income. Additionally, if you are getting unemployment benefits, social security, alimony, or rental payments, then all of these income sources will be considered. FHA guidelines for their loans will also consider part-time pay and any bonuses or overtime payment as long as this income is stable and can be verified.
What are qualifying debt ratios? – This is the place that it gets interesting. As opposed to conventional loans allowing you around 28% toward housing and then 36% toward housing plus additional expenses, the FHA allows 29% of your current income to go toward housing and 41% toward housing plus other long-term liabilities. So you can see what I mean about FHA loan guidelines being easier to qualify for.
Credit Score – This is an area of flexibility with FHA loans. You can qualify for FHA programs without any credit history period. Most people prefer paying cash to pay bills, or either they’re too young to have created any credit history yet.
Suppose your credit is bad or you’ve had a bankruptcy. If you are able to prove that it was over 2 years ago since the bankruptcy was discharged, and all your liens and judgments have been paid, you are still eligible to qualify for an FHA mortgage. You can even do this if you have a current payment schedule in place for paying off the judgments. Paying steadily on these judgments serves as your credit history.
Down Payment Requirements – Your minimum down payment calls for 3.5% of your purchase price. This down payment can either be a grant or cash gift. Many of the conventional loans call for a 10% down payment, and this has to come straight from you as the borrower.
Even if you’ve gone through a foreclosure, if it’s been over 3 years since it was discharged, you are still able to qualify for you loan. I hope now it’s plain to see that obtaining an FHA loan can be your best bet.