An FHA loan is meant for borrowers whose income falls under the low to moderate range. Typically, the FHA loan requirements include a down payment whose minimum is lower than that of conventional loans. Taking on an FHA loan also has a lower credit score requirement than most conventional loans.
Who can qualify for an FHA loan?
In a nutshell, nearly anyone will be able to qualify for a mortgage that’s insured by the FHA. This is, of course, as long as some requirements on the basic end are met. Contrary to popular belief, it’s not just first-time home buyers who can take advantage of this program. Even if the potential borrower has already owned a home before, they can try to take on an FHA loan.
- First-Time Home Buyers – As previously mentioned, these are the most known qualifiers for an FHA loan. They comprise the majority of the applicants that look to make use of this program. The 3.5% down payment makes it a rather well-known method of financing.
- Repeat Home Buyers – Having owned a home before is not a hindrance or deterrent for taking an FHA loan. It’s important to be able to meet the minimum requirements.
- Home Buyers Whose Credit Scores Are Less-Than-Perfect – For as long as the credit score of the borrower is at least 580, there’s a possibility they will qualify. This makes the program popular among people who had problems with their credit in the past.
- Non-US Citizens – It’s possible for someone who is not a US citizen to qualify for an FHA loan as long as they’re able to have their residency status documented. The very official handbook of the FHA has a statement on this: “US citizenship is not required for mortgage eligibility.” It is possible for “permanent resident aliens” to apply for the program.
Additional categories for people who can qualify for an FHA loan also include: People who have incomes that are relatively high, people with limited funds for down payment, and people who want to flip (buy and renovate) a home.
It should be noted that there’s some flexibility to the minimum requirements necessary to take on an FHA loan:
- A credit score of 580 or higher is needed for borrowers to be able to qualify. This way, they can use a 3.5% down payment.
- It’s key for borrowers to have enough income in order to manage recurring debts and their monthly payments all at once.
- The level of debt that borrowers have must be at a level that is manageable. It will be determined by factors such as the debt-to-income ratio (DTI).
Conclusion
The Federal Housing Administration (FHA) has a federally insured mortgage generally known as an FHA loan. Just about anyone can qualify for this loan as long as bare minimum requirements are met. Contrary to popular belief, it’s not just first-time home buyers who can seek to take advantage of this; repeat home buyers can also do so. Thanks to an FHA loan, along with some basic requirements, anyone can own a home.
Need assistance with FHA home loans? Contact YOUnited Lending today! We specialize in residential mortgages in South Carolina.
