The Federal Housing Administration (FHA) is an agency within the Department of Housing and Urban Development (HUD), which insures loans made by approved mortgage lenders. The government will not offer loans. Instead, the lenders will offer the loan so that you can purchase a home, and the government will guarantee it.

However, as the government will insure the loan program that does mean you don’t need to meet any requirement for the loan. The FHA-approved lenders will ask you to meet some requirements that you have to fulfill. Although the requirements vary from a lender to a lender, there are some that are common. Would you like to know about FHA loan requirements Texas? Here, we have listed down a few for you –

  • Proof of income

One of the primary requirements that you have to fulfill when you apply for an FHA home loan program is proof of stable income. And this proof can come in the form of pay stubs or recent tax returns. And for this, you should have two years of steady employment from the same employer that has either stayed the same or increased with time.

  • No bankruptcies

Some HUD properties might need that you be out of bankruptcy longer than two years. However, you need to prove that you have gone at least the long before you can be considered eligible for an FHA home loan program. So, you have to meet this requirement.

  • Minimum credit score

While conventional home loan programs require a credit score of 620 or higher, an FHA home loan program only asks for a minimum credit score – 500 to make you applicable for a loan. Generally, a homebuyer with a credit score below 500 can’t opt for an FHA home loan program; however, there are several mortgage lenders who can approve the loan application if the buyer meets other requirements. Besides, one can use several tricks to boost their credit score even a bit and cross the benchmark of 500.

  • Down payment

IN order to get an FHA loan, you have to make a down payment from 3.5 percent to 10 percent. It is based on your credit score. If you want to qualify for the 3.5 percent down payment, your score should be 580 or more than that. Otherwise, the HUD will ask for a higher percentage to combat the risk of approving your loan.

  • Debt-to-income ratio

Your debt-to-income ratio shows how much you owe in payments each month compared to your monthly income. FHA loan requirements also include debt-to-income limits. Your mortgage payments should be less than 31 percent of your monthly gross income, although it is possible to be approved for up to 40 percent of your monthly gross income. Your total debt-to-income ratio should not exceed 43 percent of your gross monthly income.

When a homebuyer applies for an FHA loan, he or she always wants that his or her loan application is approved quickly. As you are now familiar with the requirements, fulfill these basic requirements and ensure quick approval of your loan application from a lender.

Author Bio: Joan Gallardo, a Senior Loan Officer, with 20+ years of experience, here writes on 2 questions to ask the best mortgage lender in Houston when you are about to choose one of the first time home buyer programs in Houston.


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