FHA Handbook

FHA Handbook

Similar to conventional mortgages, FHA home loans are governed by a set of rules and guidelines that participating lenders must adhere to in order to be insured by the U.S. government. These rules are compiled in a reference book known as HUD 4000.1, or the Single Family Housing Policy Handbook (SF Handbook).

The SF Handbook contains the regulations for FHA loans, including guidelines for “forward mortgages,” which are intended for borrowers looking to purchase a house, condominium, townhome, manufactured home, and other property types. Additionally, the Handbook provides rules for FHA refinance loans and FHA “reverse mortgages” available to qualified borrowers aged 62 or older.

As a potential homebuyer exploring mortgage options, you must meet several requirements to qualify for a loan. Many of these guidelines are detailed in HUD 4000.1 and serve as a reference for FHA’s minimum credit standards, appraisal criteria, and more. However, it is important to recognize that state and federal laws, lender-specific standards, and other regulations may also come into play, in addition to those outlined in the FHA Handbook.

Credit History

Lenders review your credit history, which reflects your borrowing and payment habits, to gauge your likelihood of repaying a mortgage loan.

Debt Ratio

Measures how much debt you have compared to your total assets. A lower debt ratio improves your chances of qualifying for a mortgage.

FHA

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

Loan Term

A loan term is the period during which a borrower makes monthly payments on a home loan. It can change based on the borrower’s payment habits and refinancing.

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