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FHA Loan Requirements

A FHA (Federal Housing Administration) loan is an excellent option to purchasing a home with a low down payment. The credit requirements for a FHA loan vary from state to state, so you will need to check to make sure you understand the FHA loan requirements for your state.

FHA loan requirements include the following:

Any person applying for a loan must have good credit for at least 2 consecutive years following a bankruptcy and the bankruptcy must be at least 2 years old.

Any foreclosure history must be at least 3 years old and a good credit history for at least 3 consecutive years.

You will need to prove that you have had a stable income for at least 3 years and that you have paid all your bills during that time period.

You must be able to make a 3% down payment, which is considerably lower than conventional loans.

There is a 2.25% closing cost and monthly payments on your FHA loan must be roughly 30% of your income.

One FHA loan requirement that is nice is that you can assume an existing FHA loan from a seller, if you meet all the qualifications, or you can pass the loan to a buyer.

There are also FHA loan requirements that the property must meet before it can be considered eligible for the loan. Eligible properties include:

Single-family home

2-4 unit properties

Condominiums

Double-wide manufactured home

Modular home

Homes that are ineligible or that do not meet FHA loan requirements include:

Co-ops

Boarding houses

Commercial property

Hotels

Private Clubs

Seller has owned the house for less than 90 days

In order to meet FHA loan requirements , the property must be used as a primary place of residence.