Understanding FHA Loan Requirements
Tuesday, February 26, 2019, 6:00 AM | Leave Comment
We know that when you ask for a loan, there are usually requirements that need to be met before we can get approved. These requirements can make getting a loan harder, but they protect the lender from giving out money to someone who cannot pay them back.
We’ve seen it before what happens when too many loans get handed out to people who actually cannot afford them (2008 market crash as an example).
Many find out the difficulty of loan requirements when it’s time to buy a house.
Because there are many types of housing loans you can look at, it can be difficult to keep track of all the different requirements. One loan worth looking at is an FHA loan.
If you’re considering to buy a house with this type of loan, consider the FHA loan requirements in Florida first.
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Employment History
When you go to a lender for an FHA loan, they will want to see that you have not just any job, but one that you’ve been at for at least two years. A steady job means you have a steady income and should be able to afford the monthly loan payments.
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Credit Score and Down Payment
Another requirement that you typically see is having to meet a certain credit score and a percentage of the purchase in a down payment. Your credit score will tell the lender how reliable you are at paying off your debt and bills in time.
The down payment is an added security for the lender by having some of the money up front.
With FHA loans though, the credit score and down payment requirement tend to be quite lower than a conventional housing loan.
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Must Be a US Resident
The FHA Loan (Federal Housing Association Loan) is for United States residents only. You must prove this by having a valid Social Security number, along with your current address. You’ll want to have solid proof of your address by having bills, pay stubs, and anything else that has your name with the address on it.
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No Bankruptcy or Foreclosure
If you’ve gone through bankruptcy in the past, that won’t necessarily stop you from getting an FHA loan. However, the requirement around bankruptcy is that you’ve been out of it for at least two years.
There can be an exception to this requirement though. If you’ve been out of bankruptcy for at least a year and can prove that the circumstances were beyond your control and that you’re responsible with your money, you may be able to get an FHA loan still.
The same goes for a foreclosure, but you must be out of that for at least three years. Again, if the circumstances were beyond your control, that could make you be an exception to the requirement.
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Home Standards
The home you’re thinking of buying also has requirements it must meet for you to get an FHA loan. There will be certain standards that the potential property must meet upon appraisal. If the appraisal shows to be below those standards, it will be up to either the buyer or the seller to ensure all repairs are done to bring the home back up to the loan standards.
