October 19, 2012
Income is a topic that comes up in frequently asked question about FHA loans. Some potential borrowers are misinformed about the nature of FHA mortgages; they think the program is only for the financially disadvantaged.
Can a borrower earn too much to qualify for an FHA home loan? Is there a “ceiling” for the amount of income you can earn and still apply for an FHA guaranteed home loan?
No. According to the FHA and HUD, “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.”
That’s not to say that there are NO income limits associated with FHA loans; “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.”
The phrase “in conjunction with an FHA loan” is the important one in that paragraph.
The real test as to whether you qualify for an FHA loan or not is whether the borrower can afford the loan, assuming he or she qualifies via a credit and employment check. The FHA official site describes what it takes to be considered a good risk;
“FHA insures mortgages made by approved lenders to individuals and non-profit and government agencies that are approved to participate in HUD’s programs; HUD does not loan money to homebuyers. 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.”
FHA loans are also not only for first-time home buyers. Anyone who qualifies for an FHA loan can borrow, regardless of whether it’s the first time the borrower has purchased a home or not.
Do you have questions about the FHA home loan process? Ask us in the comments section.
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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