iLoan's Guide to FHA Loan Eligibility Requirements

Navigating the world of home loans can be complex, but understanding the eligibility requirements for an FHA loan is crucial in making an informed decision. This guide by iLoan is designed to clarify the criteria you need to meet to take advantage of the benefits offered by FHA loans.

What is an FHA Loan?

An FHA loan is a government-backed mortgage insured by the Federal Housing Administration, designed to help lower income and first-time homebuyers purchase homes.

FHA Loan Eligibility Requirements

1. Credit Score:
   • Minimum credit score of 500 for a 10% down payment.
   • A credit score of 580 or higher qualifies for a down payment as low as 3.5%.
2. Down Payment:
   • Ranges from 3.5% to 10%, based on your credit score.
3. Employment History:
   • Stable and consistent employment history, typically for the last two years.
   • Income must be verifiable through pay stubs, tax returns, and bank statements.
4. Debt-to-Income Ratio (DTI):
   • Typically, the DTI ratio should not exceed 43%. However, exceptions can be made for ratios up to 50% in some cases.
5. Primary Residence:
   • FHA loans are only eligible for primary residences. Investment properties and second homes do not qualify.
6. Property Requirements:
   • The property must meet HUD’s minimum property standards and pass an FHA appraisal.
7. Mortgage Insurance:
   • Borrowers must pay a Mortgage Insurance Premium (MIP), which includes an upfront premium and an annual premium.
8. Loan Limits:
   • FHA loans have maximum borrowing limits, which vary based on the county and property type.
9. Legal Residency:
   • Applicants must be legal U.S. residents with a valid Social Security number.
10. Age Requirement:
    • Borrowers must be of legal age to sign a mortgage in their state.

Questions Call (888)416-4805

Applying for an FHA Loan with iLoan

Step 1: Pre-Approval

• Start by getting pre-approved with iLoan to understand how much you can borrow.

Step 2: Find a Suitable Property

• Look for a home that meets FHA requirements and fits within your budget.

Step 3: Complete Your Application

• Submit your application to iLoan along with the necessary financial documentation.

Step 4: FHA Appraisal and Approval

• The property will undergo an FHA appraisal. Once approved, you can proceed with the closing process.

Conclusion

FHA loans can be an excellent path to homeownership, especially for those with limited funds or less-than-perfect credit. iLoan is here to guide you through every step of the FHA loan process.

Contact iLoan today to discuss your eligibility and get started on your home-buying journey.