FHA (Federal Housing Administration) Loans
FHA loans are insured by the Federal Housing Authority (FHA). They are geared towards helping moderate to low income families buy their homes. FHA insured loans are available for single-family and multifamily residences, manufactured homes and some health –related facilities. If a homeowner with an FHA insured loan defaults on his or her mortgage payment, then the FHA will pay the lender thus lenders bear less risk. However, borrowers must meet certain requirements to qualify for an FHA loan.
FHA Mortgage Rates
Need help with the latest FHA mortgage rates or FHA lenders? Visit our mortgage rates page that has information on FHA mortgage rates and FHA Lenders.
FHA Loan Requirements
To qualify for an FHA loan, you must have legal residency in the United States and a valid social security number. Also, you must be of a legal age to sign on a mortgage in your state.
In addition, the lender will also look into the these factors: Credit: Credit score speaks about your ability and willingness to make future payments to the lender because credit score is derived from your past data or history of financial payments and considered as an indicator of your financial health. For a conventional loan, your credit history is usually the most important factor that lenders consider. With an FHA loan, it's not the primary factor. Usually, the FHA requires a one-year period of acceptable credit, during which you have made all your payments regularly. But if you have not developed a credit history then alternative credit verification will be used that may include your insurance payments, rental payments, utility payment records and other payments. Income: The loan amount for which you can qualify depends on your monthly income and ability to pay back monthly and annual payments. Although FHAs aim is to help low and middle-income families get a mortgage loan but they take your income level as a base to decide on your ability to payback. Thus, all of your income is calculated to ensure that it is sufficient to cover the mortgage and other obligations. Also, the stability of income and the chances of continuance of payment are analyzed. Debt to income ratio: Debt-to-income ratio compares an individual's debt payments to the income he/she generates. This ratio shows how much income is spent on expenses and how much is left at the end of each month. This ratio is a very important tool to know how much a borrower can afford and his ability to make mortgage payments.
FHA Loan Limits
FHA Loan limits differ from state to state. We have collected the FHA Loan limits for all the states for your reference.
Choose Your State