FHA 2020 loan requirements

The FHA loan requirements include minimum credit values ​​and down payments. And there are limits on the loan amount and your total monthly debt.

FHA loan requirements

  • A credit score of at least 500.
  • A debt-to-income ratio of 50% or less.
  • 3.5% deposit if your credit score is 580 or higher.
  • 10% deposit if your credit score is 500-579.

The house must be your primary residence and meet the minimum FHA ownership requirements.

Are FHA loans only for new buyers?

No. Contrary to popular belief, FHA loans are not just for first-time buyers. FHA loans generally have more flexible rating requirements than traditional mortgage loans. This makes FHA loans attractive to borrowers with lower credit scores or lowers down payments, which is a common challenge for first-time buyers. But anyone, even a regular buyer or homeowner who wants to refinance a mortgage, can use an FHA loan as long as they meet the eligibility requirements listed below.

FHA deposit: 3.5% minimum

At FHA, the minimum deposit depends on your credit rating. With a credit score of 580 or higher, the minimum deposit is 3.5%. With a score of 500-579, the minimum deposit is 10%.


FHA Debt-Income Guidelines

Lenders pay attention to your debt to income ratio no matter what type of mortgage you get. The debt-to-income ratio (DTI) measures the percentage of your pre-tax income you spend on monthly debt payments, including mortgages, credit cards, student loans, and other commitments. You can use a debt-to-income ratio calculator to determine your position.

According to Brian Sullivan, a public affairs specialist in the United States Department of Housing and Urban Development, the FHA requires a debt-to-income ratio of 50% or less. USA which manages the FHA. DTI requirements may vary depending on creditworthiness and other factors.

Income Requirements for FHA Loans

There is no minimum or maximum wage that you can earn, which qualifies you or prevents you from getting an FHA insured mortgage. However, you must:

  • Have at least two open credit accounts. Examples: a credit card and a car loan.
  • Have no federal, criminal, tax, or other debt, lawsuits, or debt related to FHA-insured mortgages.


FHA documentation

  • Here are some of the documents you need to apply for an FHA home loan:
  • You must provide proof of a social security number.
  • Please submit the original payslips, W-2 forms, or valid tax returns if necessary.
  • Of course, there are other regulations, but an FHA approved the lender will explain the details to you if other requirements apply.

FHA property requirements

In addition to the borrower’s qualifications, the property itself must meet certain requirements before it can qualify for an FHA mortgage.

The loan must be for a principal residence and at least one borrower must move into the property within 60 days of closing.

It cannot be an investment property.

An FHA appraisal involves a strict inspection in which a house is appraised not only in terms of value but also in terms of minimum standards for real estate.

The property cannot be an investment, which means that you cannot buy a house within 90 days of a previous sale.

You must acquire the property in your name or in the name of a living trust in the agreement.


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