What Are Some FHA Loan Guidelines?

Would you like to know the FHA loan guidelines? For many people, they think FHA loans are hard to get. However, you may find that an FHA loan is easier to obtain than a conventional loan these days.

The Department of Housing and Urban Development or (HUD) for short has a government program to help Americans qualify for a home loan and become a proud home owner. During this current housing crisis, the FHA requirements have never been easier. Please don't think I'm saying that it's easy, I just mean for first-time home buyers, in today's market, this is the best way to go.

You may have to search rather hard to find a good loan officer that will do an FHA mortgage, but it is possible. Personally, I think that loan officers are somewhat lazy and avoid the FHA mortgage. But you, the first time home buyer, have that challenge to find and obtain a good FHA home loan.

So what are the income requirements?

For one thing, there is no real minimum income requirement for this type of home loan. However, you do need stable income for at least the last three years. You must be able to prove that you have paid your bills on time.

The FHA loan guidelines takes into consideration income from seasonal jobs, any child support you receive, as well as retirement and pensions. Furthermore, if you receive unemployment benefits, or even VA benefits, Social Security or disability income, rental payments and alimony, all of these sources of income can be considered. FHA loan guidelines also takes into consideration, part-time pay any overtime and bonuses you have been paid as long as it is stable and verifiable income.

So what are the qualifying debt ratios?

Now this is where the program gets interesting. Unlike conventional loans that allow only about 28% towards housing and 36% towards housing plus other expenses, FHA will allow 29% of your income to go to housing costs and 41% of income to go to housing cost and other long-term liabilities. So now can you see why I say FHA loan guidelines are easier to qualify for?

How about down payment requirements?

Again, FHA loan guidelines allow you more flexibility here also. The minimum down payment requirement is 3.5% of the purchase price. Again, the beauty of the FHA programs is that the down payment can be a cash gift or a grant. Most conventional loans today, require upwards of 10% down payment. And furthermore, with conventional loans the down payment has to come directly from you the borrower.

Now let's talk about credit score

Here again, FHA loan guidelines are more flexible than conventional lender guidelines. You can actually qualify for an FHA program with no credit history at all. Many people prefer to pay cash for their bills, or are too young and do not have a credit history.

You can use alternative forms of credit such as car insurance, rental payments, cell phone bills and student loans for your credit requirements. Just ask your lender about this.

Once again I say that the FHA loan guidelines are easier because you do not have to have good credit. Now suppose you have some bad credit or perhaps even a bankruptcy or judgment from your past. If you can prove that it has been two years since your bankruptcy has been discharged, that all judgments and liens are paid then you can still qualify for a mortgage. This even works if there is a current payment plan in place to pay off your judgments. If you have a good history of paying these judgments, this can serve as a credit history.

In the unlikely event that you had a foreclosure in the past and it has been at least three years since it has been discharged, you can still qualify for a loan. I hope you can see that the FHA loan is the best way for you to go.

So personally, I feel that this is the best way for first-time home buyers to purchase a home. But the question remains, what are the best FHA home programs for you? Did you know that you can buy a foreclosure home, and even get it repaired with a FHA loan? FHA loan guidelines have and never been easier. There is no sense in renting. Why not buy a house today?

Jeffrey Ragan has several years of experience helping people reach their goals and wants to help you learn more about FHA home loans and other helpful information on their website, First-Time-Home-Buyer-Solutions.com.