Applying for FHA Loans

Although the FHA program has helped many low- to moderate-income individuals become homeowners, the program is not a welfare program, and it is not limited to low-income borrowers.

However, if you have excellent credit and a substantial amount of money for a down payment, there is little benefit to be gained by applying for an FHA loan, and you will get a better interest rate with a conventional loan. Also, if you are an investor and do not plan to live in the property you want to buy, FHA programs are not for you.

FHA programs are open to anyone, regardless of age or income level. The program only requires that the borrower have satisfactory credit, three percent of the purchase price for a down payment, and enough income to make the monthly payments. FHA mortgages are not like federally subsidized housing, where residents must income-qualify. Although you must have enough income to meet your obligations, there are no set income guidelines to qualify.

Although FHA mortgages are designed for people who will live in the home being financed, mortgages are not limited to single-family dwellings. In addition to single-family residences, FHA loans can also be used to purchase two- to four-unit properties, so long as the owner will be resident. FHA loans can also be used to purchase condominiums.

If you want to purchase a property in need of rehabilitation, you may not qualify for conventional financing, which often requires the home to meet certain standards. If you are buying a “fixer-upper,” FHA programs can help with both the purchase price and with financing some of the repairs.

Lenders may not discriminate based on a borrower’s sex, creed, religion, sex, or marital status.