How to Qualify for FHA Loan
The Federal Housing Authority or FHA is a government institution with a goal that aims to help Americans own a home through housing loan programs that feature little to no down payment from the borrower. First time home buyers can easily apply and get approved for an FHA home loan compared to other housing loan programs offered by private banks and other lenders. FHA loans have become popular in recent years after banks and other financial institutions tightened their loan approval criteria following the sub-prime housing mortgage crisis of late 2007. Because of these strict policies and requirements, first time buyers and borrowers with lower credit scores have had to turn to FHA insured loans to avoid being declined on their housing loan applications.
The United States government insures FHA loans in its attempt to keep a balance between real estate investors with large amounts of wealth and the average everyday worker. Anyone can apply for FHA loan programs to purchase or refinance their home. If it’s your first time applying for a home loan or you have a not so perfect credit score, FHA can grant you a home loan based on your employment history and your ability to
pay the monthly loan payment not the size of your savings account.
Requirement for FHA Loan Program
Borrowers with history of foreclosure and short sale can apply for FHA loan back to work programs that will allow borrowers to get back into the real estate market after experiencing a financial hardship. Borrowers with a previous bankruptcy filing also have the ability to get approved for an FHA home loan provided that they have maintained a good credit and financial history for a minimum of two years following the bankruptcy discharge date. In most cases an FHA home loan will allow a borrower to refinance or purchase a home when they would normally be declined with any other loan program.
One drawback of the FHA home loan is that, lenders require extensive supporting documents and follow strict internal policies during the underwriting process making things seem more confusing than they need to be. This is why it is recommended that borrowers who want to apply for FHA loan assistance consult a licensed NMLS loan originator to handle the process. You can contact us and see how we can help show you how to qualify for FHA loan programs in your area.Source: qkmortgage.com