Articles Tagged With: FHA Loan Rules

January 23, 2026

FHA Loan Rules: Co-Borrowers and Co-Signers

Many first-time homebuyers use FHA loans because of their flexible qualification standards. In some cases, a borrower may choose to apply with a co-borrower or a co-signer to strengthen the loan application. FHA loan rules allow both options, but they are not the same, and HUD applies different requirements depending on which role is used. Understanding the difference is critical before applying. FHA Distinction Between Co-Borrowers and Co-Signers FHA guidelines are governed by HUD Single Family Housing Policy Handbook 4000.1, which replaced HUD 4155.1 and is the current controlling authority. Under FHA rules: Co-borrowers (occupying or non-occupying) Take title to the property Are obligated on the mortgage note Must sign all loan and security instruments Share full legal responsibility for repayment Co-signers Do not take title to the property | more...

January 16, 2026

FHA Loans and Your Credit History: One Critical Factor Borrowers Often Overlook

By Bruce Reichstein

FHA Loans and Your Credit History: One Critical Factor Borrowers Often Overlook If you are planning to apply for an FHA home loan, your credit profile plays an important role in the approval process. Many borrowers focus on avoiding new credit inquiries, paying down balances, or checking FICO® scores. While those steps matter, there is one often overlooked factor that can significantly influence FHA loan approval: Your recent payment history on all financial obligations. Under FHA underwriting guidelines, lenders evaluate a borrower’s overall pattern of managing credit, not just their credit score. This includes how consistently financial obligations have been paid over time. While the FHA does not publish a strict rule requiring 12 months of perfect payment history, most FHA lenders place strong emphasis on the most recent 12 | more...

How much can I borrow with an FHA refinance loan?

January 13, 2026

UFMIP Explained: FHA Loan Rules for Upfront and Monthly Mortgage Insurance

By Bruce Reichstein

For most FHA single-family purchase and refinance loans, borrowers are required to pay an Upfront Mortgage Insurance Premium (UFMIP) at closing. FHA mortgage insurance protects the lender—not the borrower—against loss if the loan defaults. FHA mortgage insurance consists of two separate components: Upfront Mortgage Insurance Premium (UFMIP) – paid once at closingAnnual Mortgage Insurance Premium (MIP) – charged annually and paid monthly as part of the mortgage payment According to U.S. Department of Housing and Urban Development (HUD), most FHA-insured loans require both an upfront and an annual mortgage insurance premium. How Much Is the FHA UFMIP? For the vast majority of FHA loans today, the UFMIP equals: 1.75% of the base loan amount(also expressed as 175 basis points) UFMIP Example If your FHA base loan amount is $300,000: UFMIP | more...

The FHA Loan That Helps You Build On Your Own Lot

January 1, 2026

FHA One-Time Close (OTC) Construction To Permanent Loan Limits Are Higher In 2026

By Bruce Reichstein

If you want to build a home from the ground up using an FHA One-Time Close Construction Loan, there’s good news for you in 2026. Your buying power has increased thanks to FHA loan limits published at the start of the new year. The Department of Housing and Urban Development issues updated FHA loan limits on an annual basis. The limits vary depending on whether the housing market in a given zip code is considered typical, high-cost, or low-cost. In 2026, the limits for all FHA forward mortgages (including FHA One-Time Close Construction Loans) increased in many areas across the USA. FHA loan limit calculations include a nationwide forward mortgage limit ‘floor’ and ‘ceiling’ for a one-unit property. If you want an FHA One-Time Close Construction Loan in 2026, the | more...

July 16, 2025

FHA Home Loan Approval Problems: New Credit Applications

By Joe Wallace

You may have heard advice about seeking new credit while you are in the home loan process. Much of this advice is definitely applicable, especially in times of economic uncertainty and questions about the direction of the housing market. Anyone who advises you NOT to apply for new credit once you have started your home loan journey is thinking with your best interests in mind, but what is it about this advice that makes it so critical? A lender doesn’t pull your credit reports just once during the home loan process, and if your lender sees new information that potentially changes your ability to qualify for the mortgage, it may be necessary to re-approve you for the loan. And that’s just the presence of new credit in your report. What | more...

June 24, 2025

Comparing FHA Home Loan FICO Score Requirements

By Joe Wallace

If you’re thinking about buying your first home, you’ll want to consider your options carefully, compare lenders, and compare loan products. No two home loans are exactly alike, and many borrowers find that some mortgage loan options are better for their circumstances than others. We examine some of the similarities and differences between FHA loan FICO score requirements and other types of home loans. Is an FHA mortgage right for you? Or do you qualify for other options in addition to an FHA mortgage? True or false? Your credit score is usually the first thing lenders check when you’re buying your first home. True! Your credit score is often the first thing lenders check. This highlights the importance of your credit score in the initial stages of applying for a | more...

June 12, 2025

What To Think About When Comparing FHA Lenders

By Joe Wallace

Why do we say choosing the right lender for your FHA home loan is essential? Because no two financial institutions are exactly alike, you may find a lender willing to offer the type of mortgage you need at an affordable interest rate. But until you compare offers, how will you know if you have realistically set your price point and target interest rate? It’s not just whether the lender offers the type of FHA mortgage you need–such as an FHA condo loan or an FHA One-Time Close Construction mortgage. It’s also whether the lender is offering you a competitive interest rate. When rates trend higher, does your selected loan officer reprice the interest rates or up the closing costs instead? If you don’t know, you won’t know how to compare | more...

April 9, 2025

Preparing For An FHA Mortgage Loan

By Bruce Reichstein

Applying for an FHA home loan doesn’t happen overnight–it takes time to plan, budget, examine your credit, and save money for the fees and expenses associated with an FHA mortgage. If you’re new to the home buying process and don’t know where to start, a good place to start is to get an idea of how much home you can afford with your present income, debts, and financial obligations. Do you want to know how much you can borrow and how much your payments might be? You can use an online mortgage loan calculator to estimate these amounts. Remember that the amount of the loan you might qualify for and the mortgage payment you can afford may be two different things altogether, which is why many web-based tools include multiple | more...

March 31, 2025

Are Military Members Eligible For FHA Mortgages?

By Joe Wallace

One common question about FHA loans involves whether or not military members are eligible to apply. Depending on circumstances, some military members may choose FHA mortgage options over VA loan benefits. What do FHA loan rules tell lenders about veterans and currently serving members of the U.S. military? HUD 4000.1 contains the rules that apply in these cases. One reason some might mistakenly assume military borrowers might not qualify for FHA mortgages is the FHA’s occupancy rule for new purchase loans and refinances. But FHA loan rules include the following on occupancy for military applicants: “Borrowers who are military personnel, who cannot physically reside in a Property because they are on Active Duty, are still considered owner occupants and are eligible for maximum financing if a Family Member of the | more...

February 18, 2025

FHA Home Loan Approval Versus Your Debts

By Joe Wallace

In 2025 a successful FHA home loan application means taking some extra time in the planning stages to work on your financials including your credit scores and the amount of debt you carry. Some borrowers don’t view those two issues as being equal…at first. FHA Loan Approval Factors You Should Know Your FICO score range is an important part of the data your lender uses to justify approving your mortgage. But it isn’t the only benchmark. Did you know that to be approved for an FHA mortgage, try to come to the loan application process with a debt ratio of 43% or less? That means your monthly outgoing debt takes up no more than 43% of your monthly income. Managing Your Debt Ratio: How To Get Started The Consumer Financial | more...