FHA Home Loan Requirements 2017 In Illinois & Florida

This BLOG On FHA Home Loan Requirements 2017 Was UPDATED On June 15, 2017

When we talk about FHA home loan requirements, we’re not exactly talking about a mortgage loan.
  • It is the Federal Housing Administration, also known as FHA, insuring against the mortgage loan that the home loan borrower has been granted by a private mortgage lender.
  • FHA is a government agency under the U.S. Housing and Urban Development (HUD) 
  • FHA is not a lender
  • FHA role is to insure home loans that meet FHA Guidelines to banks and lenders that originate, fund, and service home loans that meet all of FHA Home Loan Requirements in the event the homeowner with the FHA home loan defaults on their FHA Loan and the lender loses money
  • Due to the government guarantee, most lenders aggressively want to lend to homeowners who need FHA Loans because in the event if the loan defaults, it is insured, thus, minimizing the risk to the lender.

Federal Housing Administration: FHA

The Federal Housing Administration is a governmental agency that insures the mortgage loans to mortgage lenders against default.
  • The Federal Housing Administration has its own rules and FHA home loan requirements that mortgage lenders need to adhere to in order to be insured by the FHA. 
  • The Federal Housing Administration has its minimum guidelines but the mortgage lender can set overlays that are more strict than the minimum FHA home loan requirements. 
  • A FHA insured loan is a great option for home buyers who do not meet the tougher conventional mortgage loan underwriting guidelines and for those who have had recent bad credit. 
  • It is a great program for first time home buyers as well.

What Are FHA Home Loan Requirements 2017?

What are the FHA home loan requirements to get a FHA insured?
  • A mortgage loan borrower needs to consult with a FHA insured and approved mortgage lender and be able to have a 3.5% down payment. 
  • The down payment needs to be documented as of where it was derived. 
  • Gifts from family are allowed. 
  • The mortgage loan borrower will qualify for a 96.5% FHA home loan plus closing costs. 
  • Closing costs can be paid by the borrower, or the seller can contribute up to 6% of the purchase price to help the borrower paid closing costs. 
  • The lender can assist with the closing costs as well for a higher interest rate. 
  • The property the home loan borrower will qualify for is a one to four unit residential owner occupied property. 
  • By owner occupied, the home needs to be the mortgage loan borrower’s principal residence and cannot be a rental home or investment home.

2017 Changes On FHA Guidelines

The FHA home loan requirements are the following:
  • FHA mortgage loan borrowers must have a valid social security number
  • Be a lawful resident of the United States and show two year residential history
  • Be of legal age
  • Be employed for at least two years and show two years of employment history
  • Show that they have consistent document income
  • Provide promising future employment with consistent income to be able to pay for their new FHA Loan
  • Meet minimum credit and debt to income ratio requirements
  • The home loan borrower needs to apply for a mortgage application as part of the FHA loan requirement and state all of his income, asset, debt, and credit information. 
  • Other FHA loan requirement is the borrower must submit two years tax returns, two year W2s, recent bank statements, and other credit information like bankruptcy papers, divorce decree, child support, etc.

Other FAQ About FHA Home Loan Requirements 2017?

Home buyers can qualify for FHA Loans with bad credit, prior bankruptcy, prior foreclosure, prior deed in lieu of foreclosure, prior short sale, outstanding collections, outstanding charge off accounts, and can qualify for FHA Loans during a Chapter 13 Bankruptcy Repayment period.

  • There is no waiting period after a discharged date of a Chapter 13 Bankruptcy to qualify for FHA Loans.
  • There is a two year wait period from the discharge of a Chapter 7 bankruptcy if the borrower has filed for bankruptcy. 
  • If the borrower had a home foreclosure, then there is a three year waiting period from the date of the sheriff’s sale or the date the deed of the home was transferred out of the homeowners name. 
  • FHA home loan requirements on credit scores is quite lenient but most mortgage lenders have overlays when it comes to credit scores. 
  • Most mortgage lenders require a minimum of a 620 credit score.
  • The Gustan Cho Team are loan officers who are experts in originating and funding FHA Loans with no FHA Lender Overlays.

Minimum Credit Scores FHA Home Loan Requirements 2017

  • To qualify for a 3.5% down payment loan FHA Loans, credit scores need to be at least 580. 
  • However, borrowers with credit score is between 500 and 580 can qualify for FHA Loans with automated underwriting system approval as long as they have 10% down payment. 
  • The Gustan Cho Team will only go by AUS FINDINGS and has no FHA Lender Overlays.

FHA Home Loan Requirements 2017 On Under 580 Credit Scores

If your credit score is under 580 and you only have 3.5% down payment to put down on your new home, contact me at www.gustancho.com and I can help you repair your credit and improve your scores so you qualify for a 3.5% down payment FHA insured mortgage loan.

FHA Debt to Income Ratios Requirements

Most FHA mortgage loan lenders like to see debt ratio no greater than a 43% combined debt to income ratio.
  • However, most lenders have lender overlays on debt to income ratios
  • FHA Guidelines On Debt To Income Ratio allows up to 56.9% debt to income ratio as long as the borrower has credit scores of at least 620 FICO

Home buyers who need a loan officer who specializes in originating FHA loans with no lender overlays or have questions on FHA home loan requirements, please contact us at 800-900-8569.

Gustan Cho NMLS ID 873293
The information contained on Gustan Cho Associates website is for informational purposes only and is not an advertisement for products offered by The Gustan Cho Team @ Gustan Cho Associates or its affiliates. The views and opinions expressed herein are those of the author and/or guest writers of Gustan Cho Associates Mortgage & Real Estate Information Resource Center website and do not reflect the policy of Gustan Cho Associates Lenders Network, its officers, subsidiaries, parent, or affiliates.

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