About FHA Loans
FHA loans are government-backed mortgages designed for borrowers with lower credit scores or smaller down payments. These loans are ideal for first-time homebuyers and those who may not qualify for conventional financing, offering more lenient eligibility requirements.
Key Points
Minimum down payment: 3.5% (with a credit score of 580+)
Minimum credit score: 500 (with 10% down payment)
Debt-to-income (DTI) ratio: Typically up to 57% (with compensating factors)
Loan limits: Varies by location
Mortgage insurance: Upfront & annual mortgage insurance premium (MIP) required
Steps to a Successful FHA Loan
Check Your Eligibility – Ensure your credit score is at least 580 (or 500 with a 10% down payment).
Determine Your Loan Limit – FHA limits vary by county, so verify the max loan amount in your area.
Save for a Down Payment – A 3.5% down payment is required if your score is 580+.
Get Pre-Approved – Gather necessary financial documents and receive a lender pre-approval.
Find a Home that Meets FHA Standards – The home must pass an FHA appraisal and safety inspection.
Submit Your Loan Application – Provide proof of income, tax returns, and employment details.
Undergo FHA Loan Underwriting – Lenders review your financial history and approve the loan.
Close on Your Home – Pay required closing costs, finalize paperwork, and get the keys!