FHA Requirements
 

FHA - Loan Requirements - Eligibility For a FHA Loan
FHA (Federal Housing Administration) loan is a mortgage you can obtain through an FHA-approved lender. This is an insurance program that makes a payment guarantee to the mortgage lender, who issues and administers the loan. FHA-insured loans offer an option to buyers who do not qualify for traditional mortgage loans, however, there are guidelines on the types of ownership and dwellings permitted.

FHA Home Loan Requirements -Advantages of an FHA loan 

- FHA LOANS - First time buyers
- Borrowers with little to no money
- Home Buyers with less than perfect credit
- Non-occupant co-borrowers
- No pre-payment penalty
- Low monthly Mortgage Insurance (PMI)
- 3.500% down payment
- 6% seller concessions
- All funds can be gifted
- No reserve requirements
- No income limits
- Very competitive Mortgage Interest rates

FHA requires deposit of 3.5%. This money can be a gift. No reservations are necessary. Closing costs can be funded in the amount of the loan.

FHA Credit Requirements -Minimum credit score 620
•Some Mortgage lenders impose their own min. FICO
•Last 12 months should show no late pmts.
•Judgments typically must be paid
•Collections not required to be paid
•Letter of explanation should be in the file for all bad credit
•Non-traditional credit allowed

 FHA Loan Information - FHA Property Guidelines:
1.Housing is defined as owner-occupied properties of one to four units. There are more defined programs in certain areas that allow for other types of purchases, such as mobile homes.
FHA Appraisals
2.Appraisals are required on all FHA loans and must include a condition report. The appraisal will list known defects along with statements regarding the property safety, security and soundness; properties can be rejected if they do not meet the minimum requirements.
FHA HOAs
3.In 2006, FHA issued the "mortgagee letter" which addressed the added contingencies of homeowner associations (HOAs). These associations often had requirements that conflicted with FHA regulations, forcing buyers to use traditional loans; if the property is part of an HOA, consult its rules prior to making an offer using FHA financing.
FHA 203K Loans
4.For larger expenses to the buyer, such as furnaces or appliances, the FHA recommends lenders offer Section 203 type loans. These loans allow you to include these expenses in the mortgage.
home Improvements

FHA Home Loan Limits:
Limits vary by county
•Loan limit is before UFMIP is included
•Higher loan limits for 2-4 unit properties

FHA LOAN Guidelines - Property

Limited to owner-occupied property
•Available for 1-4 unit properties
•High LTV available for OO 4 unit
•No minimum credit score
•Flexible down payment sources allowed
Manual underwriting common/allowed
•Good documentation is the key
•Borrowers in active Ch. 13 can buy
•Manufactured Homes Are Allowed

•Secure – Does the value support the loan?
•The days of the VC sheet are gone!
•FHA appraisals resemble conventional
•Roofs and lead-based paint still an issue
•Mfg. homes that have been moved are not eligible

There are FHA loan limit amounts. The National Housing Act provides formulas for HUD to designate maximum mortgage FHA loan limit amounts. These FHA loan limit amounts are determined by the county in which the property is located.

Seller can contribute more on a FHA Loans – Up to 6%
Borrower can obtain a gift from a relative

Conventional mortgage loans usually require 20% down.