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FHA Loan Income Requirements: A Reader Question

December 16, 2014

A reader asks, “I would like to know how can I get a FHA Loan if my husband and me just make 40.000 a year. I went on bankruptcy in Oct 2011. Right now I have no debts, no car loans. I need an answer as soon as possible, we are living place to place, we paid rent on time,but living with more people is difficult. Also we have $10.000 for a downpayment.”

FHA loan rules have no specific minimum income requirements for loan approval. FICO scores are used to approve the loan, as is your employment history and the likelihood of your current employment to continue.

One of the most important things related to the borrower’s income isn’t the amount of that income, but rather how the income is used. If a borrower has too much debt, it doesn’t matter how much or little the amount of that income is, the lender can’t approve the loan if the debt to income ratio is too high.

Borrowers who have little debt in the situation described above have a better chance at loan approval. The lender must determine if you can afford the loan you’re applying for on top of your existing monthly financial obligations. The borrower’s combined income with another borrower would still need to be examined in light of the debt picture for both parties.

Naturally, the amount of the loan might also be an important factor–if the mortgage payment is too high, the borrower may not be able to afford that loan with the other monthly obligations. But a loan that is the right size may be no problem for the lender to approve, depending on circumstances. Borrowers should discuss their needs with a loan officer to see what might be possible.

Do you have questions about FHA home loans or refinance loans? Ask us in the comments section. All comments are held for review.

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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