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.

FHA

The Federal Housing Administration (FHA) is a government agency that insures FHA-approved mortgage loans to promote affordable housing in the U.S.

FHA Limits

The FHA sets limits on the amount it can insure for government-backed loans. These limits vary based on location, property type, and conventional loan standards

Loan Application

To begin mortgage process, you must fill out and submit a loan application to your lender. This form and documents help assess your eligibility for the mortgage

Equity

Home equity is the portion of your home that you own. It increases as you make mortgage payments, showing you own more of the property over time.

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