North Carolina FHA Loan Requirements For Homebuyers

North Carolina FHA Loan Requirements For Homebuyers

North Carolina FHA Loan Requirements in North Carolina benefit first-time homebuyers, buyers with lower credit scores, and prior bad credit. HUD, the parent of FHA loans created lenient North Carolina FHA Loan Requirements to promote homebuyers to be eligible to purchase a home with a 3.5% down payment and credit scores as low as 580 FICO. Borrowers with credit scores down to 500 FICO are eligible for an FHA loan. If your credit scores fall between 500 to 579 FICO, HUD requires a 10% down payment versus a 3.5% down payment. As with other loan programs, the higher your credit scores, the lower your mortgage rates are priced. It is best to boost your credit scores prior to applying for an FHA loan in North Carolina. The housing market in North Carolina is booming. Many Americans from high-taxed states are relocating to North Carolina due to its low taxes, affordable living costs, and affordable housing. FHA loans are the most popular loan program in North Carolina for homebuyers due to their lenient agency mortgage guidelines. In this article, we will discuss and cover the North Carolina FHA Loan Requirements for homebuyers.

North Carolina Housing Market

North Carolina Housing Market

The state of North Carolina is located in the Southeastern region of the United States. As the 28th largest state in the nation, it has the 9th most people. It is also a state with a large number of vacation/second homeowners due to bordering the Atlantic Ocean. Many oceanfront homes and condominium complex homebuyers throughout the bordering cities by the ocean. Many homebuyers choose North Carolina as the state to retire due to its beautiful landscape and low cost of living. The state is bordered by Virginia to the north and South Carolina and Georgia to the South and Tennesse to the west. Charlotte is North Carolina’s largest and most populous city with a population of 2.6 million people. Charlotte is also the nation’s 23rd most populous city in the nation. Many financial institutions base their headquarters in Charlotte. Gustan Cho Associates has a large client and realtor partner base in North Carolina. GCA Mortgage is a mortgage company licensed in multiple states with a large presence in North Carolina. Gustan Cho Associates has a national reputation of not having any lender overlays on FHA, VA, USDA, and conventional loans.

North Carolina FHA Loan Requirements For Frist-Time Homebuyers

North Carolina FHA Loan Requirements are lenient for first-time homebuyers. Full-time students who recently graduated from high school, trade school, junior college, college, or graduate/professional schools can qualify for FHA loans without a prior work history. Recent graduates can qualify for an FHA loan as long as they are recent graduates and get a full-time job offer, you are exempt from the past two-year work experience requirement. Lenders will go with the income stated on your employment offer letter. Lenders will require 30 days of paycheck stubs prior to closing. The years as a full-time student will be comparable to the past two years of work experience. If the recent graduate has no credit scores or lacks credit history, the lender can use non-traditional credit in lieu of traditional credit. Renters can qualify for an FHA loan to qualify for a home purchase with a 3.5% down payment.

Closing Costs On Home Purchase In North Carolina

Closing Costs On Home Purchase In North Carolina

Two costs that homebuyers need to come up with when purchasing a home in North Carolina are the down payment and the closing costs. The down payment is a fixed percentage of the home purchase price. The closing costs vary depending on the type of property, the location of the property, and the borrower.

There are closing costs on home purchase and refinance transactions. However, closing costs can be covered with a seller concession by the home seller. Your loan officer will structure how your closing costs will be covered by guiding the real estate agent on how to structure the home purchase contract. A seller concession is when the home seller will add the closing costs as part of the home purchase price. If the homebuyer is short to cover the closing costs on a home purchase, the lender assists with covering the closing costs for the homebuyer if they are short covering closing costs with the seller concession. The lender can offer a lender credit to cover the shortage of closing costs in lieu of a higher mortgage rate. The seller concession will be paid by the seller to cover the homebuyer’s closing costs. The team at Gustan Cho Associates are experts in helping first-time homebuyers purchase a home with as little money as possible.

North Carolina FHA Loan Requirements For Homebuyers With Bad Credit

Every hard-working American can run into financial difficulties at one time in their lives. They can have periods of unemployment, illness, death in the family, be affected by the coronavirus pandemic, or divorce. FHA loans are the best loan program for borrowers with prior bad credit or lower credit scores to buy a home in North Carolina. The mission of HUD, the parent of FHA, is to help hard-working Americans qualify for a home loan with little down payment, lower credit scores, and prior bad credit. Borrowers with credit scores down to a 500 FICO can qualify for an FHA loan. However, if your credit scores are under 580 FICO, HUD requires borrowers to put a 10% versus a 3.5% down payment. Some of the many reasons why FHA loans are so popular are due to the low down payment requirements, low credit scores allowed, high debt to income ratio caps, and not be required to pay outstanding collections and charged-off accounts. North Carolina FHA Loan Requirements allow for borrowers to qualify for an FHA loan after the Chapter 7 Bankruptcy discharged date. There is a two-year waiting period after the Chapter 7 Bankruptcy discharge date to be eligible for an FHA loan. There is a three-year waiting period after foreclosure, deed in lieu of foreclosure, short sale to qualify for FHA loans in North Carolina.

North Carolina FHA Loan Requirements And Guidelines

North Carolina FHA Loan Requirements And Guidelines

HUD, the parent of FHA is the government agency that creates and implements FHA loans. The following are the North Carolina FHA Loan Requirements:

  • HUD requires a 580 credit score for a 3.5% down payment home purchase FHA mortgage loan
  • Homebuyers with credit scores between 500 to 579 can qualify for an FHA loan with a 10% down payment versus a 3.5% down payment
  • 2-year prior work employment history
  • Gaps in employment in the past two years is allowed
  • Debt to income ratio cannot exceed 46.9% front-end and 56.9% back-end to get an approve/eligible per automated underwriting system findings
  • Non-occupant co-borrowers allowed for borrowers with high debt to income ratio
  • 60 days of bank statements and/or other financial statements showing the down payment
  • Borrowers should not have had any bank overdrafts in the past 12 months
  • Multiple bank overdrafts can be a deal killer
  • No late payments in the past 12 months
  • Only one to four-unit residentially zoned owner-occupant primary homes are eligible for FHA financing
  • Second homes and investment properties are not eligible for FHA mortgages
  • There is a one-time 1.75% FHA mortgage insurance premium
  • There is an annual 0.85% FHA mortgage insurance premium charged on all 30-year fixed-rate mortgage loans that cannot be canceled unless the FHA loan is paid off
  • FHA loan limits for 2021 is $356,362 unless the property is located in a high-cost area
  • There is a two year waiting period after the Chapter 7 Bankruptcy discharged date
  • There is a three year waiting period after foreclosure, deed in lieu of foreclosure, short sale to qualify for an FHA loan
  • Borrowers in an active Chapter 13 Bankruptcy can qualify for an FHA loan during their repayment period after making the first 12 payments with trustee approval
  • Needs to be a manual underwrite
  • The Chapter 13 Bankruptcy does not have to be discharged
  • There is no waiting period after the Chapter 13 Bankruptcy discharged date to qualify for an FHA loan
  • If the Chapter 13 Bankruptcy discharge has not been seasoned for two years, the file needs to be a manual underwrite
  • Manual underwriting guidelines apply

Gustan Cho Associates are experts in originating, processing, and closing FHA manual underwriting files in North Carolina. The team at Gustan Cho Associates closes thousands of FHA and VA loans for borrowers with 500 credit scores and higher debt to income ratios. Over 75% of our borrowers are folks who could not qualify at other lenders due to a last-minute mortgage loan denial or because the other lender had lender overlays. At GCA Mortgage, we have zero lender overlays on FHA, VA, USDA, and conventional loans.

Qualifying For An FHA Loan In North Carolina With A Mortgage Company With No Lender Overlays

The North Carolina FHA loan requirements we covered in this article are the agency mortgage guidelines by HUD. Most mortgage companies in North Carolina will have higher lending requirements on FHA loans in North Carolina. North Carolina mortgage lenders need to meet the minimum North Carolina FHA Loan Requirements set by HUD. However, each individual lender can have higher lending requirements that are above and beyond the HUD minimum agency mortgage guidelines called lender overlays. Mortgage companies can have higher lending requirements on just about anything. Typical lender overlays by lenders include higher credit score requirements, lower debt to income ratio caps, not accepting outstanding collections and/or charged-off accounts, not accepting manual underwriting, not accepting gift funds, not taking any FHA loans under 580 credit scores. North Carolina mortgage lenders can not accept FHA loans on just about anything the lender considers high risk. Gustan Cho Associates is a North Carolina mortgage company licensed in multiple other states with zero lender overlays on government and conventional loans. GCA Mortgage has zero lender overlays. We only go by the minimum agency mortgage guidelines of HUD, VA, USDA, Fannie Mae, Freddie Mac. Over 75% of our borrowers are folks who could not qualify at other lenders. If you are looking to get qualified for an FHA loan in North Carolina with a lender with no lender overlays, please contact us at 262-716-8151 or text us for a faster response. Or email us at 262-716-8151. The team at Gustan Cho Associates is available 7 days a week, evenings, weekends, and holidays. Gustan Cho Associates has a national reputation for being able to do loans other loan officers cannot do. We are experts in handling FHA loans with 500 credit scores, folks in Chapter 13 Bankruptcy repayment plans, borrowers with large outstanding collections and charged-off accounts, borrowers with high debt to income ratio, and other folks with credit and income issues.

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