FHA Guidelines

In 1934 the Federal Housing Administration (FHA) created the National Housing Act which has helped millions of Americans become proud first time homeowners. The Act is still going strong today, and has made the entire loan process much simpler and easier than ever before. The FHA does this by making the loan process affordable for families who might not otherwise qualify for a conventional loan.

Although the FHA has made it possible for low to middle-income families to qualify for home loans, there are still some guidelines that need to be met. In order to obtain your FHA Loan, your application will be evaluated based on your credit score, debt-to-income ratio and the county’s loan limit.

Credit Score

Your credit score will need to be submitted to the FHA and your lender for evaluation. It is an indicator of how much of a risk you will be to insure, and how well you will be able to make payments in the future. Most conventional loans are very strict when it comes to the credit score, but the FHA is much more lenient. Even if you have no or low credit, you might still be able to qualify for a loan, especially if you have a co-signor who has decent credit.

Debt-to-income Ratio

Your debt-to-income ratio looks at your salary and then subtracts your monthly bills. It will take all your expenditures, such as tuition, car payments, etc., subtract it from how much your monthly wage is to find out how much money you have left at the end of each month. This number helps the FHA know just how much you will be able to afford for mortgage payments.

Loan Limits

The FHA will only insure your loan up to a certain amount. This amount depends on how big your family is and what county you plan to purchase your house in. It’s important to remember that the FHA will only insure one property for you at a time, and this property must be your planned primary residence.

Pre-Qualification

Although the FHA does look at things like credit scores, debt-to-income ratios and county loan limits, it is still very easy to qualify for a loan. You can even get pre-approved in minutes when you fill out our secure online form. It’s free with no obligations and will have you on your way to homeownership in no time!

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