What is a FHA Loan? A FHA loan is a Mortgage insured by the Federal Housing Administration. People who are approved for FHA Loans pay for mortgage insurance, which prevents the lender from a loss if the borrower defaults.


Created by congress in 1934, the FHA became a part of HUD’s (Department of Housing and Urban Development’s Office of Housing) in 1965. Today, their mission includes helping people get the mortgages they qualify for, and it also assists lenders by lessening their risk in issuing loans to borrowers.


The FHA loan limits are changed every year and are based upon many factors. Current FHA limits are updated on this site as they change.


The minimum credit score for FHA loans depends on the type of down payment you are looking to put down. If you want a down payment as low as 3.5%, your credit score needs to be a minimum of 580. If your score is between 500 & 579, the loan requires a 10% down payment. Scores under 500 are generally ineligible.


It is definitely in your best interest, to approach the FHA loan with your credit score as good as possible. If you have had credit problems in the past, FHS recommends a Consumer Credit Counseling program to avoid being denied. They will speak with you about debt-to-income ratio, always submitting a payment on time, and challenging the errors on your credit report.






The FHA Loan application asks for a lot of information. You will need to provide the lenders with a lot of information, including:



    • All addresses where you have lived in the last 2 years


    • Employers name and address for last 2 years


    • Gross salary


    • Last 2 W-2’s


    • Income tax forms



It is best to gather these before you even begin the application process, so that it is handy before the process even begins.


If you are a Vet, you will need to submit your DD214 along with your loan application paperwork. If you do not have a cop of your DD214, request a copy from your final out-processing base (orderly room, records office, or outbound assignments/out-processing office), or request the form from the DoD (Department of Defense) electronically.


For more detailed information, please visit the FHA website here.


Until next time friends…


Nicole D., Tobacks Resident Blogger

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