What is an FHA Home Loan?
An FHA loan is a government-backed mortgage that is insured by the Federal Housing Administration (FHA). FHA loans have more flexible lending requirements than those of conventional loans.
FHA Loan Requirements
Below is a list of some of the general requirements and characteristics of FHA loans:
- Down payment can be as low as 3.5%
- The higher the credit score, the lower the down payment
- A lower credit score will require a higher down payment
- Loan amount is based on conforming loan limits, which varies based on the housing type and the state and county in which the property is located.
- Mortgage insurance is required on FHA loans.
- Must have a steady income history.
- Total monthly debt cannot be more than 43% of your monthly income.
- Mortgage payment (including PITI) needs to be less than 31% of your gross monthly income.
How to Qualify for FHA Loans
The requirements listed above hopefully provide a better understanding of how to qualify for FHA loans. GuardHill provides FHA loans for 1-4 family dwellings and utilizes our in-house underwriting team to provide fast approvals to streamline the closing process.