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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.

FHA Mortgage Loan Rates

November 15, 2018
FHA Rates for November 15, 2018
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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

FHA Refinance Loans: Five Things to Remember

November 9, 2018 - While using your existing lender may be easier, you may not always get the most competitive rates or terms without shopping around. Any participating FHA lender offering the refinance loan you seek can help you; don’t feel limited to the financial institution that originated your first loan.

Are You Ready for an FHA One-Time Close Construction Loan?

November 8, 2018 - There are important things to consider before you start discussing your needs with a participating FHA lender, and coming into this mortgage loan process fully prepared will definitely save you a great deal of time.

Affordable Down Payments for an FHA Mortgage

November 7, 2018 - The prospect of making a down payment on a mortgage loan can be daunting for some first-time home buyers. But there are ways to make your FHA home loan down payment more affordable. Start by working on your financial qualifications or looking for local down payment assistance programs.

FHA Texas One-Time Close Construction Loans

November 4, 2018 - FHA One-Time Close construction loans are an important option to consider for those looking for a home in Texas. That market is an excellent place to consider building a home from the ground up with a One-Time Close (OTC) mortgage.

Five Facts About Home Loan Closing Costs

November 3, 2018 - There are five basic facts you need to know about the closing costs associated with your FHA home loan. Knowing these facts can help you better plan your home loan budget, save up money for the costs you don’t wish to finance, etc.

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!