About · Press · Contact · Write For Us · Top Personal Finance Blogs
Featured In:

How To Qualify For An FHA Mortgage

By Erik Folgate

The Federal Housing Administration offers a great mortgage product for those of you that don’t have much of a down payment for a house. It’s also good for those that need to live in a more expensive area, but don’t have a 10% down payment given the home prices in the area. Conventional loan lenders have tightened up quite a bit, especially in states such as Florida, Nevada, California, New York, and Arizona that boast a huge foreclosure rate. Bank of America won’t consider anyone for a loan in Florida without a 10% down payment, because they aren’t willing to take a risk on young buyers. Not having a huge down payment doesn’t always mean that you can’t afford a mortgage. The FHA has slightly more lenient underwriting guidelines, because they believe in the American Dream, and they realize that there are still many potential homeowners looking to buy with a solid financial picture.

Here are some of the requirements for qualifying for an FHA mortgage:

  • They require 3% down. Sometimes, you can get down payment assistance, but it’s very tough given the current market conditions. But, saving up 3% isn’t tough, so I’d just go ahead and ge the 3% stashed away before you apply for an FHA loan.
  • You can’t have a bankruptcy or foreclosure in the last three years.
  • FHA is looking for solid income earners. They typically lend amounts that won’t exceed 30% of your household income. For example, if you make $4,000 a month, they don’t want to lend you an amount that will exceed a $1,000 a month mortgage payment.
  • Pay any open collection accounts. They won’t let you close on a house until you pay any unpaid collections. They don’t want to see more than 2 unpaid accounts over 30 days in the past two years.
  • A credit score of at least 680 is the magic number. This is tough for most, and it’s not specifically required, especially if you have a foreclosure on your credit. Get your score to that number and you’ll get the most competitive rates.
  • At least two years of employment history with the same employer. They are looking for stability, and this requirement is huge with the FHA.

If you fill all of these requirements, then you shouldn’t have a problem getting an FHA mortgage. Email me with any questions.

Erik Folgate
Erik and his wife, Lindzee, live in Orlando, Florida with a baby boy on the way. Erik works as an account manager for a marketing company, and considers counseling friends, family and the readers of Money Crashers his personal ministry to others. Erik became passionate about personal finance and helping others make wise financial decisions after racking up over $20k in credit card and student loan debt within the first two years of college.

Related Articles

  • Older Buyer

    [B]Bank of America won’t consider anyone for a loan in Florida without a 10% down payment, because they aren’t willing to take a risk on young buyers.[/B]

    What about older buyers?

  • author

    umm, i don’t think your age matters, but they might consider it if you’ve had good standing previous mortgage history. But, i know that BOA is pretty strict on their underwriting guidelines right now.

The content on MoneyCrashers.com is for informational and educational purposes only and should not be construed as professional financial advice. Should you need such advice, consult a licensed financial or tax advisor. References to products, offers, and rates from third party sites often change. While we do our best to keep these updated, numbers stated on this site may differ from actual numbers. We may have financial relationships with some of the companies mentioned on this website. Among other things, we may receive free products, services, and/or monetary compensation in exchange for featured placement of sponsored products or services. We strive to write accurate and genuine reviews and articles, and all views and opinions expressed are solely those of the authors.

Advertiser Disclosure: The offers that appear on this site are from credit card companies from which MoneyCrashers.com receives compensation. This compensation may impact how and where products appear on this site, including, for example, the order in which they appear on category pages. MoneyCrashers.com does not include all credit card companies or all available credit card offers, although best efforts are made to include a comprehensive list of offers regardless of compensation. Advertiser partners include American Express, U.S. Bank, and Barclaycard, among others.