Requirements to Get a FHA Loan
FHA loan requirements are set by the Department of Housing and Urban Development. FHA loans are federally insured and backed, so many lenders will more readily make this type of loan rather than a conventional loan which requires a larger down payment than an FHA loan.
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Considerations- Borrowers
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FHA loans usually require only a 5 percent down payment. The house payment should not exceed 29 percent of your income. Your debt to income ratio should not be more than 41 percent. The borrower must have a social security card, or if a legal alien, a green card. The borrower also must be the primary resident.
Considerations- Co-borrowers
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The co-borrower must sign the mortgage and deed papers. If the co-borrower is a spouse, he should also occupy the property. A non resident co-borrower may be put on the loan to strengthen the loan. This should be a relative if the loan will remain as a typical FHA loan with a low down payment. If the co-borrower is not a relative, the amount of loan will equal only 75 percent of the purchase price.
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Considerations For the House
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Houses will have to pass an FHA appraisal, which may require some repairs to be done by the present homeowner before FHA will make a loan on that property. It must be a single family house or a condominium unit.
Lending Limits
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Lending limits will depend on the area in which you are purchasing. In less expensive areas, the limit will presently be around $200,000, while in more expensive areas like Hawaii and California, the limit is around $600,000.
Warning
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FHA lending limits are subject to rapid changes. Borrower requirements are not set in stone. The best thing to do when considering an FHA loan is to check with your local lender.
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