How hard is it to get an FHA loan? Do most places take them?

I am new to exploring the housing market. Wondering what you need to get an FHA loan (first time home buyers), and can you use them to buy a foreclosure or short sale? Can they be used for any home, or just certain ones?

What type of credit score do you need?

Do you need to be a minority, or poor?

Do you have to already own a home?

How many years of constant employment do they look for?

Does family status matter?

Update:

Any mortgage bankers on tonight? ;)

I want to have an idea of what I am looking at before I go through any specific agencies who may try to rape me.

4 Answers

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  • Jim
    Lv 4
    8 years ago
    Best Answer

    FHA Loan:

    Minimum credit score is 600 with some lenders. Typically is 620. With a 660 score you can get a 4.5% rate on a 30 year with NO points. With under $2000 in closing costs + The fha mip fee which goes to the federal government departent of HUD. The mip (mortgage insurance premium) is a fee that gets financed into the loan, which is about 1% of the total loan amount.

    You can use an FHA loan to purchase foreclosures and short sales, however you'll want to pay attention to the condition of the house. If there are any problems with the house you may run into issues, as an FHA is much more detailed.

    What type of credit score do you need? 600, but 660 to get a good rate.

    Do you need to be a minority, or poor? No, that would be illegal.

    Do you have to already own a home? No

    How many years of constant employment do they look for? 2 years would be good, but not necessarily required.

    Does family status matter? No

    EDIT: Correcting some other incorrect answers. You pay a monthly mip (pmi) no matter how much you put for a down payment on an FHA loan. And you pay it for a minimum of 5 years. If you put 90% down you still have to pay it. That's why 99% of the people that can put 20% down don't do FHA loans.

  • 8 years ago

    Minimum credit score for an FHA loan is 620; however, each lender can have their own minimum (i.e. one lender might require a minimum of 680). FHA loans require a minimum of 3.5% down (of the sales' price). You'll pay mip (pmi) monthly if you put less than 20% down - so make sure to include this into your monthly payment when you're figuring out what you can afford (in my area, it's typically 1% of the sales' price annually, divided by 12 because it's paid monthly).

    You do not have to be a minority or low-income, and you don't have to already own a home.

    Lenders will typically look for 2 years of stable employment (3 if you're self-employed).

    Family status does not matter.

    I would highly recommend that you pick up some first-time homebuying books -- there are some excellent ones out there (many at public libraries). I read The Everything First-Time Home Buyers book and the Home Buying for Dummies book -- both of which I highly recommend. The books will teach you about different loans, identifying your wants vs. needs, what to look for when buying, and will walk you through the whole process (appraisals, inspections, lenders, realtors, etc.). Good luck to you.

  • 8 years ago

    FHA programs are designed to help people especially first time buyers buy a home. Therefore the qualifications are usually easier than a conventional loan. FHA web site say minimum credit score is 580 for a 97.5 pct loan (you have to be a real dead beat to have less), open to all buyers highest price is over a million dollars, 2 years employment, family status does not matter. Almost all lenders handle FHA loans and the house must past inspection, they also do rehab loans.

    The FHA guarantees loans, so if you default the loan company is paid by the government then the FHA sells the home.

    Here is there website: http://www.fhahomeloanrefinancing.com/blog/fha-loa...

  • 8 years ago

    ask a mortgage banker

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