How to Get a FHA Home Loan

FHA loans are government-insured home loans that require low down payments and provide one of the best solutions for first-time home buyers due to lenient loan requirements and no decision based on credit scores. FHA loans are increasing in popularity for home buyers across the country.

Things You'll Need

• Pay stubs
• W-2s
• Bank statements
• Hardship letters (if applicable)

Instructions

1. Find a mortgage broker. A mortgage broker can shop your information out to several sources to help you get a quick and easy approval and get you the best loan rate and terms possible. The best way to find a good loan officer is to contact a local real estate agent. Real estate agents work with loan officers and mortgage brokers all of the time, and can assist you in selecting one that will be a good resource for FHA loans.

2. Find a good buyer's agent. Talk to at least three different Realtors and select the most competent. Sign a buyer and broker agreement with your selected agent stating that he will represent you through the process. A good agent will be able to refer you to an excellent mortgage professional.

3. Fill out the pre-qualification form for the mortgage broker. This will ask questions about your employment status and history, income, debt and credit. Submit this to the mortgage broker for review. He will call you shortly thereafter and inform you of what other supporting documentation you might need.

4. Prepare to answer difficult questions about your financial situation. If you had some credit blemishes or issues, you will need to answer for those and provide documentation to your mortgage broker on how you have improved and how you will continue to make a mortgage payment each month. For example, if you had several medical collections on your credit report, you will need to provide a hardship letter to your mortgage broker outlining the circumstances, how you are paying them back or how you are working up payment arrangements to qualify for an FHA loan.

5. Get all of your supporting financial documentation to your loan officer as quickly as possible. He will review it, put a file together and submit it to an FHA underwriter for review. The FHA underwriter will take about one week to review your documents and issue a loan approval or denial.

6. Get your pre-approval letter and bring it to your Realtor. Your agent will need to submit this with any offers on homes that you are interested in. Once you have selected a property, you will proceed to the next step in getting your FHA loan approval.

7. Write an offer to purchase the home you have selected with your Realtor. Hammer out details such as inspections and if the seller will make any contribution to your closing costs or prepaid items in that contract.

8. Supply any new financial documentation to your loan officer or mortgage broker between the time you write the purchase agreement until such time as you are scheduled to close on the property. Your loan officer will advise you of your downpayment amount (3.5 percent minimum on FHA loans) as well as a good faith estimate of what your closing costs will be in addition to your monthly payment.

9. Schedule your closing appointment. You will receive instructions from the title company on where your closing appointment will take place and the amount you need to bring with you to closing. If the sellers have contributed closing costs and pre-paid assistance, you will only need to bring your 3.5 percent downpayment at closing.

10. Wire transfer your downpayment amount to the title company 24 hours prior to your closing date. This will ensure that once you have signed the closing documentation and receive confirmation of your FHA loan funding to the seller you will receive your keys on the same day.

Tips & Warnings

• Work on credit issues prior to looking at homes. Oftentimes things like medical collections are overlooked.

• Don't expect a loan approval to be a fast and easy process. It does require work on your part.