FHA Loan Frequently Asked Questions

What are the minimum requirements for an FHA loan?

Basic requirements include:

• Credit score of 500 or higher
• Steady employment history
• Valid Social Security number
• Lawful residency in the U.S.
• Property must be your primary residence
• Property must meet FHA standards

What credit score do I need?

FHA loans have two credit score thresholds:

• 580 or higher: Eligible for 3.5% down payment
• 500-579: Eligible with 10% down payment

What are the income requirements?

While there are no specific income limits, you must have:

• Steady employment for at least 2 years
• Debt-to-income ratio typically below 43%
• Verifiable income sufficient for payments

Can I get an FHA loan after bankruptcy or foreclosure?

Yes, it's possible after a waiting period:

• Chapter 7 Bankruptcy: 2 years after discharge
• Chapter 13 Bankruptcy: 1 year of on-time payments
• Foreclosure: 3 years from completion

How does FHA mortgage insurance work?

FHA loans require two types of mortgage insurance:

• Upfront Mortgage Insurance Premium (UFMIP): 1.75% of base loan amount, can be financed
• Annual MIP: 0.15% to 0.75% of loan amount, paid monthly
• Duration depends on down payment (11 years with 10%+ down, life of loan with less)

What closing costs should I expect?

Common FHA loan closing costs include:

• FHA appraisal fee
• Credit report fee
• Title insurance and search fees
• Lender's origination fee

Sellers can contribute up to 6% of the sale price toward buyer's costs.

Are there limits on FHA loan amounts?

Yes, FHA loan limits vary by county and property type. For 2024:

• Low-cost areas: $498,257
• High-cost areas: Up to $1,149,825
• Special exceptions for Alaska and Hawaii

What documents do I need to apply?

Required documentation includes:

• Past two years of W-2s and tax returns
• Recent pay stubs and bank statements
• Proof of any other income sources
• Valid government-issued ID

How long does the FHA loan process take?

The typical FHA loan process takes 30-45 days from application to closing. Factors that can affect timing include:

• How quickly you provide documentation
• Appraisal scheduling and completion
• Property inspection results
• Current lender workload

What happens during the FHA appraisal?

An FHA appraisal serves two purposes:

• Determines the market value of the property
• Verifies the home meets FHA minimum property standards

The home must be safe, sound, and secure with no major defects.