The requirements for an FHA loan:
- Must be a resident of the USA
- Must be over 18 years of age
- Must live in the home covered by the FHA mortgage
- Mortgage insurance is required
- Must have sufficient income (loan payment should be approximately 30% of gross income, before taxes)
- Credit score preferably above 620, but not always necessary (see Minimum Credit Score Requirements)
- Two years of continuous employment preferably with the same employer and steady or increasing income
- Bankruptcy must be at least 24 months prior to application with excellent payment performance since bankruptcy discharge
- Foreclosure must be at least three years prior to application and credit performance must be excellent
Sometimes getting everything in order and acceptable to the FHA takes some time. Starting the process 6 or 8 months before actually buying a home is a good idea. You want to have your credit as good as you can. You want to demonstrate you pay in a timely manner for as many months as possible, at least 6 and a year or more is preferred. You want to have two years of 1099 payment verification or W-2 forms and two years of tax returns. Contact us and we will begin this process with you and help you to build your file and maximize your ability to borrow and improve your ability to achieve the lowest possible interest rate.
