How to Qualify for an FHA Home Mortgage Loan

Learn what it takes to get an FHA home mortgage loan

Qualify for an FHA home mortgage loan and realize your dream of homeownership. FHA mortgage loans are insured by the Federal Housing Administration. And with the FHA's relaxed lending guidelines, buyers with little cash for a down payment and would-be buyers with lower credit scores can qualify for an FHA home mortgage loan.

Things You'll Need

• Income tax returns
• Paycheck stubs

Instructions

1. Provide mortgage lender with information to document your income. Bring complete tax returns for the past two years and current pay stubs to your home loan lender's office to verify income and employment. The standard housing ratio for FHA mortgage loans is 30 percent (mortgage payment should not exceed 30 percent of gross monthly income).

2. Defer applying until time has passed since a bankruptcy or foreclosure. FHA mortgage lenders will consider your application for a mortgage only after sufficient time passes following a bankruptcy or home foreclosure. Wait two years after a bankruptcy and three years after a home foreclosure.

3. Improve your credit score to qualify for an FHA home mortgage loan. Perfect credit after a bankruptcy and foreclosure is a requirement. Pay your bills on time and keep consumer debt to a minimum to help you get a mortgage with the Federal Housing Administration. You can qualify for an FHA home mortgage loan with a minimum FICO score of 620.

4. Put a down payment on the new home purchase. FHA home loans do not require 20 percent down payments. Qualify for an FHA home mortgage loan with less than 5 percent down.

Tips & Warnings

• Each state has a borrowing limit for FHA home mortgage loans. Visit FHA.com to check the limit for your individual state.

• According to U.S. Department of Urban and Housing Development (HUD), you can include most of your mortgage closing costs (fees paid to the lender) in your loan balance with an FHA mortgage. This can reduce your additional out-of-pocket expense.

References

• FHA Home Loans: FHA Qualifying Summary
• HUD.gov: Let FHA Loans Help You