Skip to main content
_FB_2018-Icons-finalized-cleaned-up_new_FB_2018-Icons-finalized-cleaned-up_newGroup 9
Back
Scroll to top

FHA Loans 101: 3 Major Requirements


If you have a strong understanding of the FHA loan requirements, you’ll experience a quicker and smoother loan application process. FHA loans provide homebuyers of all income levels the opportunity to purchase a home with lenient qualifying terms and lower down payment requirements. There are, however, three major requirements that prevents people from purchasing an unaffordable home.

Three Major Requirements

  1. Debt-to-Income Ratio: There are two debt-to-income ratio requirements that FHA lenders will look at in order to determine if a buyer can afford a home:
    • Mortgage payment expense to effective income: Add your total mortgage payment and divide it by your gross monthly income. The maximum ratio to qualify is 31%.
    • Total fixed payment to effective income: Add your total mortgage payment and all recurring monthly debt and divide it by your gross monthly income. The maximum ratio to qualify is 43%. 
  1. FHA Credit: FHA loans are more lenient when it comes to qualifying terms, but there are still certain credit requirements applicants must meet. If you have no credit history, filed for bankruptcy, have a history of late payments, been foreclosed on, or sent to debt collections, it will be harder to get approved for a loan.
  2. Application: Aside from financial requirements, there are a few FHA loan application requirements buyers must meet and present to their loan officer:
  • Address (past two years)
  • Social Security number
  • Names and location of your employers (past two years)
  • Gross monthly salary at your current job(s)
  • Information for all checking and savings accounts
  • Information for all open loans
  • Complete information for other real estate you own
  • Approximate value of all personal property
  • Certificate of Eligibility and DD-214 (for veterans only)
  • Current check stubs and your W-2 forms (past two years)
  • Personal tax returns (past two years), current income statement, and business balance sheet for self-employed individuals

If you understand the FHA loan requirements and are ready to apply for a loan, you can apply online with First Bank.* Have more questions about FHA loans? Visit the FHA’s website, or contact your local First Bank branch to learn more.


*Equal Housing Lender. NMLS #474504. Loans subject to credit approval.

———
Sources:
http://www.fha.com/fha_requirements_debt

http://www.fha.com/fha_requirements_checklist
http://www.fha.com/

Trending Topics

Budgeting 101: Personal Budget Categories

When it comes to creating a personal budget, it can feel like there are a million financial categories to consider. In order to create a successful budget, everything should be accounted…

Is It Possible to Get a Mortgage Refinanced with No Closing Costs?

When it comes to refinancing a mortgage, you need to spend money to save money. Closing costs can amount to thousands of dollars, depending on the home loan. This is…

Mortgage Rates 101: Information You Should Know

Acquiring information about mortgage rates is a vital step in the home buying process. Mortgage rates vary based on several factors, such as the amount and type of your loan…

Refinance Your Mortgage with These 5 Tips

Over time, the mortgage market fluctuates and creates new opportunities for homeowners to revise the terms of their mortgage. This is known as refinancing. When refinanced, a mortgage can include lower…

Credit Card Processing for Businesses

If you are a business owner, you probably know that accepting multiple forms of payment (cash, debit, credit, and checks) is important. But you may not know just how essential…

Calculate Your Monthly Mortgage Loan Payment (with Taxes and Insurance)

A mortgage loan calculator with taxes and insurance can help prospective homeowners prepare for the financial responsibility of owning a home. Purchasing a home may be one of the biggest…

30-Year Mortgage Rate Forecast Tips

A great way to lock in the best mortgage interest rate is to shop around. By learning how to read a 30-year mortgage rate forecast, homeowners can pinpoint an ideal…

Home Refinance Rates from First Bank

With the country’s average interest rates for 30-year fixed mortgage rates currently at their lowest, now is a good time to consider refinancing your home. Low home refinance rates mean…

Five Reasons to Refinance Your Mortgage

Banking professionals suggest mortgage refinancing when homeowners want to replace their current loan with a new one, often to reduce monthly payments or lower interest rates. With a mortgage refinance,…

Save Money with This Refinance Calculator for Home Mortgages

When mortgage interest rates are low, homeowners should compare their current mortgage terms with the option of refinancing. By locking in the right rate, homeowners can take advantage of significant…