House Requirements for FHA Loans

Individuals who are earning a low income qualify for special home loans that help the borrower afford a home. FHA loans are a type of loan specifically designed for low income individuals and low income families. The current housing market is making it difficult to qualify for a traditional mortgage loan and the credit crunch is affecting a wide variety of income levels. Luckily, people have the option to use an FHA loan in order to qualify for a new home. FHA stands for “Federal Housing Association”, which is a government program designed to house those with a low income.

There are a few requirements that the borrower will need to meet in order to obtain a FHA loan. Verification of employment is needed when applying for an FHA loan and employment history should show that the borrower has been steadily working for the last 2 years. During those last 2 years, the borrower’s income level should remain the same or have been steadily rising. FHA loans require the borrower to have a credit checked performed in order to qualify for this type of home loan. The credit report should show no more than 2 late payments and the credit score of the borrower should meet the requirements of this type of home loan as well.

FHA loans typically require the borrower to have at least a credit score of 620 or higher. Individuals who have a bankruptcy on their credit history should be no more less than 2 years old. After a bankruptcy, the borrower should maintain a perfect credit score in order to qualify for a FHA loan. If the borrower has been through a foreclosure, the foreclosure should be at least 3 years old. After a foreclosure, the borrower should have maintained a perfect or near perfect credit score since.

Another factor to qualify for a FHA loan deals with a debt-to-income ratio. The borrower’s mortgage payment on a FHA loan should be no more than 30 percent of their income. These requirements must be met by the borrower, but there are requirements on the home itself that the borrower should be aware of. Not all homes will be qualified for a FHA loan. To approve a home for an FHA loan, the home must undergo an inspection to assess the home’s condition as well as the value of the home. An evaluation is performed on the structural integrity of the home to identify the remaining life of the home.

Any items that need to be repaired will be identified by the inspector. The repairs must be made before the borrower will be able to qualify the home for an FHA loan. An FHA loan identifies housing as being a unit that is used to house 1 to 4 families. Other types of properties like a mobile home will also qualify for a FHA loan. Sufficient appraisals and inspections will be needed for all types of housing that a FHA loan recognizes. All housing must pass these inspections and appraisals before the loan process can begin.

Individuals or families who are considered earning a low income are advised to research what homes they would like to purchase before applying for an FHA loan. Borrowers should realize their options with what homes qualify for a FHA loan and choose the appropriate homes. More information about FHA loans is found online, and the borrower can apply for this type of loan online as well. FHA loans have been helping low income families afford housing for many years. In fact, FHA loans help to stimulate the economy and keep the wheels of the housing market turning.