FHA Loans

FHA Loans are government-backed mortgage insured by the Federal Housing Administration. FHA home loans require lower minimum credit scores and down payments than many conventional loans, which makes them especially popular with first-time homebuyers.

While the government insures these loans, they are actually underwritten and administered by third-party mortgage lenders approved by the FHA.

• Minimum loan amount $50,000, Maximum loan amount $472,030.
• Minimum middle credit score 580.
• Repair and remodel mortgage are available, the minimum middle credit score is 680 for this mortgage, there will be additional costs for this mortgage, and example is 2 appraisals, a minimum of 2 inspections, none of the repairs can be completed by the buyer or a relative of the buyer, if the repairs are more than $35,000 a FHA certified consultant must be hired to work with the contractor and the lender.
• Minimum credit score to purchase a double wide mobile home is 640. Additional requirements for a mobile home are these:
  • A. The foundation installation must meet the FHA guidelines verified by a structural engineer inspection.
  • B. The mobile home must be installed at its original location.
  • C. The mobile homes value must a minimum of 70% of the total sales price.
  • D. If the home is located on a private road there must be a road maintenance agreement.
• Income requirements-A maximum of 3 employers in the previous 2 years, attending school counts as an employer. A gap in employment of more than 60 days usually isn’t accepted unless there are documented reason(s).
• Hourly or salaried employees if they are starting with a new employer must have been on the job for a minimum of 30 days prior to closing, the only exceptions are if the employee is transferring locations with the same employer, or if the employee has a signed offer letter from the new employer. 30 days consecutive pay stubs and the last 2 years W2’s is required. FHA mandates that the income must be averaged over 24 months, so if the employee receives a promotion with a higher salary the higher salary will be averaged with the previous income. There is an exception if the employee can provide a letter or verification of employment from the employer that guarantees the higher income, the higher income can be counted.
• W2 employees that receive more than 20% of their annual income as commissions, or bonuses must supply federal tax returns, and any employment related deductions will be counted against current income.
• If the buyer(s) own more than 20% of a business that files a separate return, the last 2 consecutive returns for the business must be provided, and the federal returns of the individual must be provided.
• Self-employed buyers must have 2 consecutive years of federal tax returns proving the self-employment. A year-to-date profit & loss statement must be provided and if the P & L income is less than the average of the tax returns the lowest income will be used.
  • Self-employed buyers with credit score above 740 may be allowed to only supply 1 year of self-employed tax returns, 2-year(s) proof of the business entity is required, the automated underwriting system must indicate that only 1 year tax returns are required.