FHA Loans

Borrowers with a credit score of 580 or higher can qualify for an FHA loan with a minimum down payment of 3.5% of the purchase price. For credit scores between 500 and 579, a 10% down payment is required.

All down payment funds must come from FHA-approved sources, such as personal savings, gift funds, or investments.

FHA loans require borrowers to pay Mortgage Insurance Premiums (MIP) as a safeguard for lenders in case of default.

This includes a one-time upfront fee equal to 1.75% of the loan amount and an annual MIP ranging from 0.45% to 1.05%, depending on the loan term.

MIP remains in place for the life of the loan unless the borrower makes a 10% down payment, in which case it lasts for 11 years.

The borrowing limits for FHA loans vary based on the county and whether the area is classified as high-cost or low-cost.

For 2024, FHA loan limits for single-family homes range from $472,030 to $1,089,300. Be sure to check the specific limits in your area to determine your borrowing potential.

Learn more about FHA loan limits in your region here.

Your credit score is influenced by various factors, including the types of credit you hold (e.g., credit cards, student loans, auto loans), the length of your credit history, your credit utilization, and your payment history.

For FHA loans, a debt-to-income (DTI) ratio of 43% or lower is required, and your monthly mortgage payment should not exceed 31% of your gross monthly income

To qualify for an FHA loan, you must have a steady income that can be verified with documentation such as pay stubs, tax returns, and W-2 forms.

Lenders typically require at least two years of consistent employment history. If you are self-employed, you'll need to provide two years of successful self-employment records, including tax returns and other financial documentation.

Your income should show stability or growth during this time, ensuring you have the ability to make mortgage payments reliably.