Eligibility

Eligibility

Before applying for any type of loan, it’s important to review the eligibility requirements. To qualify for a new FHA mortgage or an FHA refinance, borrowers must meet certain criteria.

Several factors determine eligibility for FHA home loans:

  • Price Ceilings: The FHA sets various price caps for the purchase price of homes, which vary by location and are regularly updated.
  • Credit Score Requirements: While the FHA allows lower credit scores compared to conventional loans, applicants with a score below 580 are required to make a minimum down payment of 10% or more.
  • Income and Employment Verification: FHA loans require borrowers to provide proof of steady employment to demonstrate “effective income.” This ensures that borrowers have a reliable source of income to support their mortgage payments.
  • Primary Residence Requirement: The property being purchased or refinanced must serve as the borrower’s primary residence. The FHA mandates that the property must be an owner-occupied dwelling.

 

The FHA loan program is known for its flexibility regarding borrower eligibility, making it an attractive option for many first-time homebuyers.

Good Faith Estimate

Good Faith Estimate is a document that helps people buying a home giving them basic info about their home loan and an idea of the costs involved in getting it.

Appraisal

When you apply for a home loan, the lender needs an appraisal to check the home’s value. An inspection and comparisons with similar homes nearby determine this.

Loan Approval

Your loan is approved when lenders officially grant you a mortgage based on the information you provided in your loan application.

FHA Requirements

The FHA has guidelines that applicants must meet to qualify for a government-backed loan. These requirements are managed by the FHA and HUD together.

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