FHA Requirements – FHA Guidelines – FHA Loan Requirements
August 31, 2010 Leave a Comment
FHA Loan Requirements – Guidelines – Loan Limits
FHA – Loan Requirements
FHA (Federal Housing Administration) loan is a mortgage you can obtain through an FHA-approved lender. This is an insurance program that makes a payment guarantee to the mortgage lender, who issues and administers the loan. FHA-insured loans offer an option to buyers who do not qualify for traditional mortgage loans, however, there are guidelines on the types of ownership and dwellings permitted.
FHA Home Loan Requirements – First time buyers
- Borrowers with little to no money
- Home Buyers with less than perfect credit
- Non-occupant co-borrowers
- No pre-payment penalty
- Low monthly Mortgage Insurance (PMI)
- 3.500% down payment
- 6% seller concessions
- All funds can be gifted
- No reserve requirements
- No income limits
- Very competitive Mortgage Interest rates
FHA requires deposit of 3.5%. This money can be a gift. No reservations are necessary. Closing costs can be funded in the amount of the loan.
FHA LOAN Guidelines – Property
Limited to owner-occupied property
•Available for 1-4 unit properties
•High LTV available for OO 4 unit
•No minimum credit score
•Flexible down payment sources allowed
Manual underwriting common/allowed
•Good documentation is the key
•Borrowers in active Ch. 13 can buy
•Manufactured Homes Are Allowed
•Secure – Does the value support the loan?
•The days of the VC sheet are gone!
•FHA appraisals resemble conventional
•Roofs and lead-based paint still an issue
•Mfg. homes that have been moved are not eligible
Seller can contribute more on a FHA Loans – Up to 6%
Borrower can obtain a gift from a relative
FHA Credit Requirements -Minimum credit score 620
•Some Mortgage lenders impose their own min. FICO
•Last 12 months should show no late pmts.
•Judgments typically must be paid
•Collections not required to be paid
•Letter of explanation should be in the file for all bad credit
•Non-traditional credit allowed
Conventional mortgage loans usually require 20% down vs FHA Loan Guidelines State that require 3.5% down.
FHA Loan Resources:
FHA Streamline Refinance
FHA Vs Conventional Loans
