An FHA loan provides a government-insured loan with flexible loan options. Even experienced homeowners may need to plan for a long time for a new home purchase. Fortunately, these loans may help some buyers get into the home of their dreams with a lower down payment.
What is an FHA loan?
An FHA loan is a type of mortgage insured by the Federal Housing Administration (FHA), which is overseen by the U.S. Department of Housing and Urban Development (HUD). While the government insures these loans, they’re underwritten and funded by independent lenders and banks.
They have a low minimum credit score and down payment requirement, which makes them especially popular with first time home buyers. You can get an FHA loan with a credit score as low as 580 if you have 3.5 percent of the home’s purchase price to put down, or as low as 500 with 10 percent down. These flexible underwriting standards are designed to help more borrowers become homeowners.
What are FHA loan requirements?
Many of the same documents are required for an FHA loan that any potential lender will want to see: employment history, appraisal, debt-to-income ratio. A few additional stipulations are also attached to the FHA loan process. Buyers may have to bring 3.5% of the purchase price as a down payment, more if they have a credit score below 580. Only available for the borrower’s primary residence.
Credit requirements may also be lower for FHA loans, given other factors demonstrate that the borrower is able to manage their money responsibly. Each lender looks at individual applications and may ask for additional documentation or explanations. They are often able to work with buyers with a lower credit score or shorter credit history than in other situations.
Who Qualifies for an FHA Loan?
In order to qualify, all loan applicants must meet certain loan requirements, including:
- 3.5% down payment
- Good work history
- Verifiable income
- Credit score of 580+ (500 with 10% down payment)
- At least one borrower must occupy as primary residence
Where are they available?
Available anywhere in the states we operate in. Our dedicated teams of local mortgage brokers are ready to help you find the home loan that best suits your needs.
- FHA Loan Georgia
- FHA Loan Alabama
- FHA Loan Florida
- FHA Loan North Carolina
- FHA Loan South Carolina
Ready to get started?
If you are interested in learning more about FHA loans, we are here to answer all of your questions. We will walk through the numbers and the process, from application to closing.
