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Approximately 40% of all home loans in the US are through the Federal Housing Administration (FHA). FHA Loans are some of the easiest types of mortgage loans to qualify for because they require a low down payment and the borrower can have less-than-perfect credit.

2020 FHA Loan Requirements:

• 500 to 579 FICO score requirement* and 10% down payment
  OR
  580 or above FICO score requirement with least a 3.5% downpayment
• An appraisal must be done by an FHA approved appraiser
• Mortgage insurance (MIP) usually around 0.85 percent of the loan amount annually
• Steady employment with proven income with recent tax returns, W2’s, and paycheck stubs
• Two years of employment at the same company
• Must occupy the home as primary residence
• At least 18 years of age

FHA Loan Advantages:

• They are very popular for first-time home buyers because of their flexible qualifying guidelines and low down payments
• Borrowers with credit scores as low as 500 can qualify for an FHA loan
• Lower income borrowers are able to get approved for a home loan through the FHA due to the FHA allowing lenders more flexibility on debt to income ratios than conventional mortgages
• Lower interest rates when compared with conventional loans, which can result in large net savings over the lifetime of a loan

Disadvantages:

• Lower loan limits
• Homes that need renovations do not qualify
• Mortgage insurance is required and Mortgage insurance costs are higher upfront
• More required paperwork

Also, take a look at FHA loan questions from other borrowers that we’ve helped. Hope this info helps and don’t forget, we’re here to help if you have any more questions.

PS Check out our simple eval process where you can choose whether you want to: get real rates specific for your scenario (beware of teaser rates!), see how much home you can afford, get pre-approved, or quickly submit your contact info so we can get back in touch.