FHA loan requirements are generally less stringent than conventional home loans in Houston. You’ll need to meet these fha guidelines before you can be approved for an fha mortgage.
What is fha? FHA, or the Federal Housing Administration, provides low-income housing assistance and insures mortgages, making them easier to get for people who may not otherwise qualify for a home loan. FHA typically asks borrowers to make 3.5 percent down payments on their homes but offers lower lending standards than most types of home loans, which makes this type of financing an attractive choice for many consumers with less than perfect credit scores or income qualifications. fha requirements – Conventional Loans vs fha Loans
Conventional Loan Requirements: 20% down Conventional Loan APR: 3.78% Conventional Loan Term: 30 years fha Loan Requirements: 3.5% fha loan APR: 4.13 fha Loan Term: 25 years
Applicants for an fHA loan are required to have a credit score of at least 580 but are allowed scores as low as 500 if compensating factors are shown in the application, such as short term payment history and recent payment amounts. fHA loans also allow you to include any upfront mortgage insurance premium fees when calculating your debt-to-income ratio; this is not the case with conventional financing. The fHA does not typically approve borrowers whose DTI is greater than 56 percent (decreased from 41 percent in 2009). Much Can I Borrow? fHA loan requirements fha guidelines fHA loans allow you to borrow up to 96.5 percent of the home’s appraised value, or purchase price plus closing costs. fHA does not have a maximum purchase price requirement and fHA mortgages are assumable from borrower to borrower when there is no evidence of fraud in a sale transaction. fha loan qualifications fha vs conventional fha fha fha loan eligibility fha loans FHA Loan Requirements for Condos
What about condo construction? To qualify as an investment property with an FHA-insured mortgage, the building must be at least 50 years old or substantially complete according to HUD standards. This can be subject to interpretation by lenders so it may behoove you to check with your fha lender to ensure that fHA fha loan guidelines fha loan requirements fha loans fHA Loan Requirements for Co-Ops
Cooperatives are generally considered investment properties if they are 50 years or older, have at least five shareholder-occupants, and meet the agency’s definition of cooperative housing. The building must have been built for this purpose and contain more than three units. FHA does not offer financing on co-ops with fewer than five shareholders – these are classified as individual properties rather than investments fHA loan guidelines fha loan requirements fHA Loan Requirements for Manufactured Homes
Benefits of FHA loan requirements fha guidelines loan requirements fHA loans fha loan qualification FHA Loan Requirements for Manufactured Homes
FHA will insure mortgages on single-wide manufactured homes built after June 15, 1976, and double-wide manufactured homes with a Certificate of Manufacture dated after June 15, 1976. FHA loan qualifications fHA Loan Requirements for One to Four Units
One-to four-unit properties can be financed with an FHA-insured mortgage if they do not contain more than four units and the property is owner occupied or reserved for occupancy by the owner while renting other units. The borrower must occupy at least one unit as their primary residence. All tenants must pass income and employment verifications. FHA Loan Requirements for 1-4 Unit Homes loan FHA loan guidelines fHA Loan Requirements for Multi-Family Properties
