FHA Loan Requirement

Purchase:

• 500-579 credit score requires 10% down payment
• 580 or higher credit score requires 3.5% down payment
• No credit scores requires 3.5% down payment
• Low interest rates
• Lenient debt to income ratios
• Gift funds acceptable
• Down payment assistance available with credit scores 620 or higher

Refinance:

• Credit score down to 500
• 12 months of on-time mortgage payments
• For a cash out refinance, 20% equity in the home is required after cashing out
• Late payments on revolving and installment accounts ok
• Debt consolidation

Property Type:

• Single Family
• 2-4 Units
• Condo
• Townhouse
• Manufactured homes
• Mobile homes

What is an FHA Loan?

An FHA loan is a loan that is insured by the Federal Housing Administration (FHA). This type of loan is ideal for those who are looking for a low down payment option and flexible credit requirements. An FHA loan can be used to purchase a 1-4 unit home, condominium, or manufactured/mobile home. It can also be used to refinance an existing mortgage. The benefits of an FHA loan include lower interest rates and more lenient credit requirements than traditional loans. With an FHA loan, you may also be able to qualify for additional assistance with down payments and closing costs.

An FHA loan is a great option for a cash out refinance. To qualify for a cash out refinance, a minimum credit score of 500 is required. The mortgage must be paid on time for at least 12 months and there must be at least 20% equity in the home after cashing out. A few reasons to apply for a cash out refinance include debt consolidation, big purchase, college, vacation, divorce, cash reserves, etc.

What Documents are Required for an FHA Loan?

• 30 days paystubs, last 2 years W2s and/or tax returns
• 2 months bank statements
• Picture ID
• Signed disclosures

An FHA loan may be the best loan option for you depending on your financial situation. At Mortgage-World.com, we determine the best program for you depending on your credit score and income

Written by: Chris Luis, loan officer for Mortgage-World.com

• Chris Luis covers mortgages and the housing market. Chris Luis has over 20 years experience in the mortgage industry.