Frequently Asked Questions about FHA Loans

FHA Frequently Asked Questions

What is an FHA loan?

An FHA loan is a type of government-backed mortgage that is guaranteed by the Federal Housing Administration and offered by private lenders that are FHA-approved. Because FHA loans are guaranteed by the government, lenders are able to have more flexible borrower requirements making them easier to qualify for.

How do I apply for an FHA loan?

FHA home loans are offered by FHA-approved lenders. To apply you can complete a loan application with your local bank or a mortgage lender that offers FHA loans.

How do I qualify for an FHA loan?

To qualify, you need a 500 credit score with a 10% down payment or a 580 credit score with 3.5% down—two years of stable employment and proof of income with two years of W2’s and tax returns. See if you qualify by applying with an FHA-approved lender.

Do FHA loans have income limits?

FHA mortgage loans do not have income limits. Your debt-to-income ratio determines the loan amount you qualify for, up to the FHA loan limit in your area.

Do FHA loans take longer to close?

The average time to close for most mortgage loans, including FHA loans, is 46 days. However, the time to close depends on several factors. You can speed up the process by getting all of your documents to your loan officer quickly and promptly responding to any requests.

Are FHA loans only for first-time homebuyers?

No. Anyone can qualify for an FHA mortgage regardless if they’re a first-time buyer or not. You cannot have two FHA loans opened at the same time unless you met certain conditions.

Which is a better loan FHA or conventional?

If your credit score is below 620 and you have less than a 20% down payment, then an FHA loan will make the most sense. However, if you have great credit and 20% down, then a conventional loan is a better option because you can avoid mortgage insurance.

Can you refinance an FHA loan?

Yes. FHA borrowers are eligible for an FHA streamline refinance after a 210 day waiting period. Streamline refinancing does not require a credit check or income verification. It’s a quick and easy way to refinance an FHA loan to get a lower interest rate and monthly payment.

How much can I borrow with an FHA loan?

The loan amount you’re approved for depends on your debt-to-income ratio. Mortgage lenders can approve borrowers with a debt-to-income ratio of 43%-50%.

Use our calculator to see how much house you can afford

What is the FHA loan limit?

The FHA loan limits vary by county. The maximum loan amount in low-cost areas is 331,400 and goes up to $765,600 in high-cost areas.

What credit score do I need to get an FHA loan?

a 580 credit score is needed if you have 3.5% to put down. At least a 500 credit score is needed if you have a 10% down payment.

Can I have two FHA loans at the same time?

Normally, you cannot have two FHA loans that the same You are able to get a second FHA loan if you have to move because of your job.