Qualify for an FHA Loan

Who can qualify for an FHA Loan?

3 Answers

There has always been a misconception about FHA Loans being for first time home buyers only or low income borrowers only. With many changes over the past decade the FHA program there is really just 2 areas of qualification that are needed to qualify (that are different to FHA Loans).

  1. The planned property use. FHA loans (with a few exceptions) are only for owner occupied properties (you're going to live in the home).

  2. The amount of the loan requested must be under the maximum loan amount for the area the property is located. You can check max loan limits at https://entp.hud.gov/idapp/html/hicostlook.cfm .

These are the 2 qualifying factors for FHA loans that would be restrictive when compared to conventional loans. I'm also assuming you know what normal loan qualifications would be concerning age, financial status, job history, etc. There are many positive benefits that make qualifying easier under FHA financing.

Further, there are 2 common misconceptions surrounding FHA and that has to do with people thinking it is the old Farmers Home Administration.  FmHA was the correct abbreviation, but many called it FHA in error.  FmHA and its successor had a direct loan program and income limits applied.  The 2 misconceptions surrounded 'recapture' which started around 1980, and having payments tied to income.  Neither are true for the true FHA [Federal Housing Administration under HUD's auspices].  It is simply an insurance program to allow buyers to have a smaller down payment. 

Some property standards apply and water source is a key--no dug wells or springs are allowed.  County loan limits also apply.  These can be found at www.hud.gov .  Anyone who will be using the home as a primary residence can qualify assuming income, credit worthiness, assets to close and the property meeting FHA guidelines can be met.  And 2-4 unit properties are eligible as well, though some special requirements must be met for 3-4 units such as reserves and the ability for the property to carry itself from the rental income.

To find out if YOU qualify, you should seek out a lender who is licensed to offer FHA products in the state where you reside.

Well according to me FHA loans are not freely assumable, as new borrowers are been checked having good credit that doesn’t mean that with good credit borrower’s will qualify. There are many clauses which one has to undergo in the perspective to get approved.