Articles Tagged With: FHA Loan

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...

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...

April 1, 2026

FHA Loan Options Are Available to Homebuyers?

By Bruce Reichstein

FHA loans remain one of the most popular mortgage options for homebuyers because they offer flexible qualification requirements and low down payment options. Many borrowers know about FHA purchase loans, but fewer realize that the Federal Housing Administration insures several different mortgage programs designed for a variety of financial situations. Whether you’re buying your first home, refinancing an existing mortgage, renovating a property, or accessing home equity, there may be an FHA loan option that meets your needs. Why Do Borrowers Choose FHA Loans? Many borrowers choose FHA financing because qualification requirements are often more flexible than those associated with some conventional loan programs. FHA loans also permit a down payment as low as 3.5% for borrowers who meet program requirements. Another advantage is that FHA allows borrowers to use | more...

January 20, 2026

FHA Loan Rules for Loan Approval: Federal Debts and Tax Liens

By Bruce Reichstein

FHA loan approval rules include specific requirements regarding unpaid federal debts and federal tax liens. These rules are outlined in HUD’s Single Family Housing Policy Handbook 4000.1 and are enforced by FHA-approved lenders. When you apply for an FHA mortgage, your lender must evaluate your income, employment history, credit profile, and all monthly financial obligations. This includes determining whether you have delinquent federal non-tax debt or delinquent federal tax debt, both of which can affect FHA loan eligibility. Understanding how FHA treats federal debts and tax liens can help borrowers avoid unnecessary delays or loan denials. FHA Loans and Delinquent Federal Non-Tax Debt According to HUD Handbook 4000.1, FHA lenders are prohibited from approving loans for borrowers who have delinquent federal non-tax debt. Federal non-tax debt includes obligations such as: | 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...

January 7, 2026

FHA Appraisal Rules On Peeling Paint

By Bruce Reichstein

Does peeling paint cause FHA loan problems? Yes—peeling paint can delay or prevent FHA loan approval, depending on the age of the home and the severity of the condition. FHA appraisal rules treat defective paint as a potential health and safety issue, not merely a cosmetic concern. Why FHA Appraisers Flag Peeling Paint FHA appraisal standards focus on: Borrower safety / Property durability and Loan collateral protection Peeling, chipping, or flaking paint can signal deeper problems and must be evaluated carefully. FHA Peeling Paint Rules for Homes Built Before 1978 Homes built before 1978 fall under federal lead-based paint regulations. If peeling paint is present: The appraiser must require repairs, lead-safe work practices must be used and repairs must be completed before FHA loan endorsement. Sellers must disclose known lead | 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...

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...

March 5, 2025

FHA ARM Loans

By Joe Wallace

There are many types of different FHA loan products. You can apply for new purchase home loans, refinance loans, and even Home Equity Conversion Mortgage loans (HECM). But even with this variety of options to choose from, did you know you can apply for purchase or refinance loans guaranteed by the FHA that have adjustable interest rates? It’s true–the FHA Single-Family Home Loan program offers both fixed-rate mortgages and adjustable rate home loans. The FHA official site has an entire page dedicated to Adjustable Rate Mortgages (also known as ARM loans). Here’s how the FHA/HUD official site defines the ARM Loan: “An ARM is an Adjustable Rate Mortgage. Unlike fixed-rate mortgages that have an interest rate that remains the same for the life of the loan, the interest rate on | more...