Things You'll Need:
- FHA-approved lenders
- Mortgage loan application
- Pay stubs/federal tax returns
- Monthly debts/account numbers
- Home purchase agreement
- Verification of deposit
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Step 1
To qualify for or assume an FHA mortgage you must first demonstrate your eligibility to a potential lender by (1) presenting a valid social security card or green card and (2) showing that the purchase is for a primary residence (defined as a single-family home, condo or townhouse) or an income property of no more than four units.
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Step 2
You must present the lender with at least two years of verifiable employment history; however, this employment does not have to be for the same employer. You must obtain written employment verification from your current employer that also states that your employment is expected to continue, uninterrupted, for the next three years.
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Step 3
You need to meet FHA income guidelines. To prove your eligibility, you need to provide pay stubs from your current employer, evidence of other income such as social security, retirement income, child support or alimony, and income verification from any part-time or secondary employment for the previous two years. Also, provide verification of all commission-type income, if any, which will be averaged over the last two years. Provide evidence of any Veterans Administration or social security benefits or other payments from a government agency.
Self-employed individuals need to submit two years of signed federal tax returns. Family business employees must verify their income with pay stubs as well as a Statement of Percentage of Ownership of the family enterprise.
If you need a co-borrower, be aware that the co-borrower is subject to the same requirements. -
Step 4
To ensure a successful application, make sure your monthly credit obligations do not exceed 43 percent of your gross monthly income. Also, if purchasing a four-unit or less income property, you must provide evidence of funds on deposit to service at least three months of debt. Additionally, you must have a satisfactory credit rating for two years. If you do not have established credit, you must present proof of a successful payment history for debts such as rent, utilities and installment debts for the previous twelve months.
If you have any accounts in collections, be aware that the lender may require you to reduce or pay off these accounts. Also, pay off all civil judgments prior to seeking loan funding. -
Step 5
Make sure you have a down payment of at least 3 percent of the property's purchase price. You also must provide financial verification of your down-payment funds.
