December 2, 2021

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FHA Loans: For Buying Your First Home

FHA Loan Down Payment Rules

Are you looking for your first home? The FHA home loan program offers mortgages with 3.5% down payments if you qualify with FICO scores, income, and responsible credit use.

What do you need to know about what it takes to get approved for an FHA mortgage as a first-time buyer?

A lot may depend on variables in your life such as how long you have been in the job market, what your current debt ratio looks like, and whether the employment you have now is stable and likely to continue into the first years of the new loan.

Why do we say this? Because FHA mortgages require a minimum income history but not a minimum income. 

FHA loan approval depends on your credit history, your FICO scores, AND your employment. If your lender can’t verify two years of job history (not necessarily with the same company or employer) you may need to wait to apply for a mortgage loan until the lender is able to do so.

The type of income you earn will also count–are you a self-employed person? If so you’ll need two years (generally speaking) of earning history in that specific type of employment.

Have you taken a job with a salary? It may be easier to qualify in such cases than for someone who hasn’t had much time as a small business owner or self-employed applicant.

In other words, the more time in your field you can show the lender, the better it is for you as a first-time homebuyer. Lenders like to see upward mobility, so any promotions or raises you have gotten should be part of the information you submit to the lender.

If you are buying for the first time, start saving as early as you can but also check your state and local government official sites for first-time homebuyer grants for the down payment and closing costs.

This can ease a major financial worry for some buyers–the ability to afford the down payment and coming up with the right amount of cash to close.

Don’t apply for other credit in the year leading up to your home loan and DO NOT apply for any line of credit after you have filled out the mortgage loan application paperwork. 

It’s not safe to assume that once your loan starts moving forward that you can apply for a new credit card or auto loan without the lender finding out. The lender can and will check your credit multiple times during any home loan transaction. Anticipate this.

Buying a home can feel intimidating but if you go into the process knowing these issues await you, that knowledge can help you make better choices and more fully informed decisions about your home loan options.

And don’t forget you can always contact the FHA directly at their toll-free number (1-800 CALL FHA) to request a referral to a local HUD-approved housing counselor who can help.

Bruce Reichstein - FHA News Author

By Bruce Reichstein

November 3, 2021

Bruce Reichstein has spent over three decades as an experienced FHA and VA home loan mortgage banker and underwriter where he was responsible for funding “Billions” in government backed mortgage loans. He is the Managing Editor for where he educates homeowners on the specific guidelines for obtaining FHA guaranteed home loans.

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About 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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