What is a FHA Mortgage?
Simply stated, an FHA loan is a mortgage insured by the Federal Housing Administration (FHA), a government agency within the U.S. Department of Housing and Urban Development. Borrowers with FHA loans pay for mortgage insurance, which protects the lender from a loss if the borrower defaults on the loan.
Here are just a few of the FHA Mortgage Qualifications
- You must have a steady employment history or worked for the same employer for the past two years.
- You must have a valid Social Security number, lawful residency in the U.S. and be of legal age to sign a mortgage in your state.
- You must make a minimum down payment of 3.5 percent. This money can be a gift from a family member.
- New FHA loans are only available for primary residence occupancy.
- Must have a property appraisal from a FHA-approved appraiser.
- Minimum credit score of 580 for maximum financing with a minimum down payment of 3.5 percent.
- Typically you must be 2 years out of bankruptcy and have re-established good credit. Exceptions can be made if you are out of bankruptcy for more than 1 year if there were extenuating circumstances beyond your control that caused the bankruptcy and you’ve managed your money in a responsible manner.
- Typically you must be 3 year out of foreclosure and have re-established good credit. Exceptions can be made if there were extenuating circumstances and you’ve improved your credit. If you were unable to sell your home because you had to move to a new area, this does not qualify as an exception to the three-year foreclosure guideline.
An FHA loan requires that a property meet certain minimum standards at appraisal. If the home you are purchasing does not meet these standards and a seller will not agree to the required repairs, your only option is to pay for the required repairs at closing (to be held in escrow until the repairs are complete).
Keep current on all aspects of FHA loans by visiting the U.S. Department of Housing and Urban Development (HUD).
Click the button below to see if you qualify for a FHA Mortgage!