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The FHA usually requires two lines of credit for qualifying applicants. An FHA loan might make the difference between owning your dream house comfortably and turning it into a financial nightmare.

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March 23, 2019
FHA Rates for March 23, 2019
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Credit Requirements for FHA Loans

Good Credit History Makes it Easier to Qualify

FHA loans provide great assistance to many first time home buyers by offering mortgage loans with lower down payments. While this is a benefit for many people, recent changes in policy may have put the loans just out of reach for some would-be homeowners with questionable credit history.

Credit History and Score Requirements

FICO Scores

For those interested in applying for an FHA loan, applicants are now required to have a minimum FICO score of 580 to qualify for the low down payment advantage, which is currently at around 3.5 percent.

If your credit score is below 580, however, you aren't necessarily excluded from FHA loan eligibility. Applicants with lower credit scores will have to put down a 10 percent down payment if they want to qualify for a loan.

So if you're planning to buy a house, and your credit score doesn't meet the minimum, you should weigh the advantages and disadvantages of putting down a larger down payment or using those funds to try and improve your credit score first.

Benefits of an FHA Loan

The reason why FHA loans are so popular is because borrowers that use them are able to take advantage of benefits and protections unavailable with most traditional mortgage loans. Loans through the FHA are insured by the agency, so lenders are more lenient. Here are a few benefits you can enjoy with an FHA loan:

  • Easier to Qualify
    While most loans exclude applicants with questionable credit history and low credit scores, the FHA makes loans available with lower requirements so its easier for you to qualify.
  • Competitive Interest Rates
    You've heard the horror stories of subprime borrowers who couldn't keep up with their mortgage interest rates. Well, FHA loans usually offer lower interest rates to help homeowners afford housing payments.
  • Lower Fees
    In addition to lower interest rates, you can also enjoy lower costs on other fees like closing costs, mortgage insurance and others.
  • Bankruptcy / Foreclosure
    Just because you've filed for bankruptcy or suffered a foreclosure in the past few years doesn't mean you're excluded from qualifying for an FHA loan. As long as you meet other requirements that satisfy the FHA, such as re-establishment of good credit, solid payment history, etc., you can still qualify.
  • No Credit
    The FHA usually requires two lines of credit for qualifying applicants. If you don't have a sufficient credit history, you can try to qualify through a substitute form.

For many home buyers, using an FHA loan can really make the difference between owning your dream house comfortably or turning it into a financial nightmare. The FHA provides a wealth of benefits for applicants that qualify, so make sure you're making full use of them.

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FHA Loan Articles and Mortgage News

Why Your Lender Wants to See Your Tax Returns

March 20, 2019 - The home loan is a major investment, and lenders are required to exercise due diligence in making sure the borrower’s financial data is accurate and meets home loan approval standards. Reviewing your tax returns shows the lender the exact nature of income and employment.

Disability Income and Your First FHA Home Loan

March 18, 2019 - Borrowers who receive disability payments may  want to have those payments considered for real estate loan approval, but what is the FHA standard in this area? If your disability income has no expiration date you may be in a good position to have that income considered for your mortgage.

Yes and No Answers to Mortgage Loan Questions

March 14, 2019 - House hunters, real estate agents, first-time home buyers, and many others have questions about FHA home loans. Some of the answers to these questions are complex and require quotes from the FHA home loan rulebook, HUD 4000.1.

Plan Ahead to Buy Your First Home

March 13, 2019 - First-time home buyers might not be used to thinking long term about buying, owning, and selling or refinancing real estate, but it’s a very good idea to consider your options long-term when planning to buy your first home.

Credit Issues That Affect FHA Home Loans

March 12, 2019 - Believe it or not, FHA loan rules require the lender to consider each of these circumstances individually to determine whether past credit problems were due to circumstances beyond the borrower’s control or if they were caused by being a bad credit risk.

FHA.com Reviews

FHA.com is a one-stop resource for homebuyers who want to make the best decisions when it comes to their mortgage. With our detailed, mobile-friendly site, individuals can access information about different FHA products, the latest loan limits, and numerous other resources to make their homebuying experience easier. Take a look at some of the reviews from other FHA.com visitors!