Do I Qualify for an FHA Loan? | FHA Mortgage Eligibility Requirements (2024)

The Federal Housing Authority (FHA) backs mortgage loans for people who don’t quite fit the traditional underwriting criteria for getting approved for a home of their own. People that benefit from these loans are first time home buyers, people who don’t have much credit history, and people who have had credit issues in the past but have everything back on track.

Because these loans are designed to help an underserved segment of the population, they tend to have more flexible lending standards than other types of loans. However, they do still have qualification requirements that home buyers much meet in order to be eligible.

Curious about whether or not you qualify for a New York FHA Loan? Read on to learn about the eligibility requirements you’ll have to meet to purchase a home with FHA financing.

FHA Loan Qualification Requirements

Eligibility factors for FHA loans fall into a few different categories. The qualification requirements are detailed below.

FHA Loan Employment Requirements

FHA mortgages are a terrific option for many individuals because they are available even to those who have had credit challenges and employment challenges in the past. Although FHA loans are a bit more flexible in terms of employment requirements, they do still require that home buyers are able to prove that they have a steady, reliable income via their means of employment in order to qualify.

If you have gaps in your employment history, you may be required to provide additional documentation to prove that you’ll be able to maintain a consistent income and repay the loan.

FHA Loan Income Requirements

FHA loans do NOT have the same type of income limitation that USDA loans have. Simply put, you can’t make “too much” or have “too high” of an income. You have to make enough to qualify of course, but there is no such thing as making too much for an FHA Loan.

That being said, FHA loans do require that you have sufficient income to feasibly pay back the loan. You’ll need to have proof that you have sufficient credit and income to cover your current debts, as well as the FHA loan payments moving forward.

Learn more about the differences between FHA and USDA loans here.

FHA Loan Credit Score Requirements

The FHA does not have a singular minimum credit score requirement that is mandated in order to qualify. However, the Department of Housing and Urban Development guidelines explain that in order to be eligible for an FHA loan:

• • Home buyers with a middle credit score at or above 580 are eligible for maximum financing
  • Home buyers with a middle credit score between 500 and 579 are limited to 90% Loan to Value
  • Home buyers with a middle credit score of less than 500 are not eligible for FHA mortgage financing

Credit requirements for an FHA mortgage do vary because underwriters will take each persons total financial situation and use that towards their decision. These more flexible lending standards make FHA loans a great option for those who have had struggles with their credit in the past, and for those who are still working to build their credit, including first time home buyers.

You can learn more about credit score requirements for FHA loans here.

FHA Loan Down Payment Requirements

FHA Mortgages are a great way to get into a home with a low down payment. One benefit of FHA loans is that they allow gift funds from family members for the down payment, and also allow home sellers to pay for closing costs. This means you don’t have to wipe out your bank account to get into the home of your dreams.

Though the down payment requirements are more flexible than those of other mortgage options, you’ll typically need to have enough saved to cover at least a 3.5% down payment on the home you’re purchasing.

Other FHA Loan Qualification Requirements

In order to purchase a home through an FHA mortgage, you must be a US resident with a valid social security number, which should not come as a surprise given that FHA loans are backed by the government.

FHA loans also require that you intend to use the home you’re purchasing as your primary residence.

There are also loan limits that you will need to be aware of if you’re hoping to finance your home purchase through an FHA loan. You can learn more about current loan limits for FHA loans here.

It’s also important to remember that various compensating factors will likely be considered to determine your eligibility for an FHA loan. Trade or credit history, length on the job, assets, and qualifying top and bottom debt-to-income ratios are just some of the compensating factors that go into an approval for an FHA mortgage.

Wondering if you qualify for a New York FHA Loan?

Curious if you might be eligible for an FHA mortgage? There are a lot of factors to consider, which can make it difficult to determine your eligibility yourself. If you’re interested in purchasing a home in New York and you’re hoping to do so with the help of an FHA loan, give us a call today at 518-782-1202 or contact us online. We’d be happy to explore your eligibility with you and help you determine which mortgage options will work best in your specific scenario.

Have questions about your mortgage options?We can help with that too! At Maple Tree Funding, we offer a wide variety of mortgage options, giving our clients the opportunity to explore a number of loan choices before deciding on what’s right for them. We work with dozens of lenders to provide competitive rates, and will guide you every step of the way as you’re navigating the mortgage process.

Looking for more information about FHA mortgages? Check out our FHA mortgages page, and be sure to visit our guide to FHA mortgages as well to get answers to some of the most frequently asked questions we hear about FHA home loans in New York.