Articles Tagged With: FHA Loan Rules

When Is An FHA Loan Better Than A Conventional Loan?

July 6, 2026

FHA Loans And Community Property States

One of the most common questions we are asked about FHA mortgages involves state community property laws, non-borrowing spouses, and their credit issues. Does an FHA loan applicant have to include a non-borrowing spouse’s financial information when applying for an FHA mortgage? The answer depends on where the borrower resides and where the property is located. If either is in a community property state, the transaction may be affected because state law can make one spouse responsible for certain debts incurred by the other spouse. For FHA loan purposes, non-borrowing spouse debt generally means debt owed by a spouse that is not also owed by, or in the name of, the borrower. A spouse is not required to become a borrower or co-signer simply because the couple lives in a | more...

July 1, 2026

FHA Home Loan Rules For Salary, Hourly, Part-Time Income

By Bruce Reichstein

Not every home loan applicant has the same type of employment, compensation, or schedule of compensation. That’s why FHA home loan rules include different instructions to the lender for a diverse range of income sources. FHA Loan Rules For “Primary Income” FHA loan rules have sections for hourly income, salary, and part-time income. The section that includes these guidelines states that the lender is responsible for examining earnings from the home loan applicant’s “primary employment” and defines it as follows: “Primary Employment is the Borrower’s principal employment, unless the income falls within a specific category identified below. Primary employment is generally full-time employment and may be either salaried or hourly.” “Current Pay” Versus “Projected Pay” According to FHA loan rules, applicants who earn a salary will generally have their current | more...

June 15, 2026

FHA Loan Rules For Part-Time Income

By Bruce Reichstein

FHA loan rules require the lender to verify employment and income. The lender must determine that a borrower’s income is stable, documented, and reasonably likely to continue. But what kinds of employment income can be used to qualify for an FHA mortgage? A reader once asked about a young borrower who held two receptionist jobs. One position had lasted more than two years at approximately 15 hours per week, while the second had lasted a little more than one year at approximately 20 hours per week. Could both incomes be used as qualifying income? The answer depends on how each job is classified and whether the income meets FHA requirements. Primary employment is the borrower’s principal job and is generally full-time, salaried or hourly. Part-time employment generally refers to work | more...

June 1, 2026

FHA Loans and Income Verification: “Future Income”

By Bruce Reichstein

Borrowers who apply for an FHA home loan are required to list the income they want the lender to consider on the application. This is required for multiple reasons; the lender must calculate the applicant’s debt-to-income ratio and determine whether the borrower appears able to afford the new mortgage payment and other recurring obligations. A borrower who has too much going out and not enough qualifying income may not be approved for an FHA loan. But there’s another reason for the requirement; an FHA lender must verify and document the employment and income used to qualify the borrower. The lender cannot simply accept on good faith that the information listed on the application is accurate. When a borrower is approved for an FHA-insured mortgage, that approval comes only after the | more...

May 1, 2026

Appraisal Rules For FHA Loans: Basements & Crawlspaces

By Bruce Reichstein

When reviewing your closing checklist or simply trying to plan for all the expenses of your FHA home loan, the appraisal and the optional—but important—home inspection are two costs you may need to prepare for. An FHA appraisal is required for FHA-insured financing. A home inspection is generally optional unless the purchase contract, lender, or another applicable requirement calls for one. Even when it is optional, borrowers should strongly consider an inspection before deciding whether to purchase a home. FHA appraisal requirements are designed to help the lender determine whether the property meets FHA minimum property requirements and minimum property standards and whether it can serve as acceptable collateral for the loan. The appraisal is not a guarantee from FHA or the lender that the home is free of defects. | more...

January 23, 2026

FHA Loan Rules: Co-Borrowers and Co-Signers

By Bruce Reichstein

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

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 months when evaluating borrower risk. Late payments during this period—especially on housing-related | 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...