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Basic FHA Loan Eligibility Requirements

March 24, 2015

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We get many questions about FHA loans–questions about FICO score requirements, questions about credit and income, residency, etc. The FHA official site (www.fha.gov) has many answers to these questions–but what ARE the basic requirements for an FHA mortgage?

FHA loan rules specify a minimum FICO score needed to qualify for maximum financing, and a minimum FICO score for basic eligibility with a larger down payment in cases where the applicant’s FICO score is close to the margins of acceptability.

“FHA insures mortgages” the official site says, “made by approved lenders to individuals and nonprofit and government agencies that are approved to participate in HUD’s programs; HUD does not loan money to homebuyers.”

The FICO score requirements mentioned previously (580 for maximum financing, and FICO scores above 500 for program eligibility with a higher down payment) are only part of the picture. The FHA official site states:

“Generally, to be eligible for an FHA loan, you must have a valid social security number and have lawful residency in the United States and be of a legal age to sign on a mortgage in your state. Lenders will verify income, assets, liabilities, and credit history for all parties on the loan.”

Some mistakenly believe there are minimum or maximum income amounts required for the FHA loan program. But the official site Frequently Asked Questions section informs borrowers, “FHA’s mortgage programs do not typically have maximum income limits for qualifying, although you must have sufficient income to qualify for the mortgage payment and other debts.”

Why do some borrowers wonder about income limits? The FHA says they could be mistaking FHA loan program requirements with third-party down payment assistance programs or HUD programs that involve secondary financing. “Income limits may be present when qualifying for down payment assistance or other secondary financing programs (including those funded by HUD) that may be used in conjunction with an FHA loan. ”

Using FHA guidelines, the official site says, lenders will make a credit determination for each FHA loan or refinance loan applicant, “based on the merits of each case. To find out if you qualify, and how much you can borrow based on your income and debts, you should contact an FHA approved lender.”

Do you have questions about FHA home loans or refinance loans? Ask us in the comments section. All comments are held for review before they can appear on the site.

Joe Wallace - Staff Writer

By Joe Wallace

Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.

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FHANewsBlog.com was launched in 2010 by seasoned mortgage professionals wanting to educate homebuyers about the guidelines for FHA insured mortgage loans. Popular FHA topics include credit requirements, FHA loan limits, mortgage insurance premiums, closing costs and many more. The authors have written thousands of blogs specific to FHA mortgages and the site has substantially increased readership over the years and has become known for its “FHA News and Views”.

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