Credit Score
To be eligible for a 3.5% down payment on an FHA loan, borrowers generally need a credit score of 580 or higher [1]. However, if your credit score falls between 500 and 579, you may still qualify but will need to put down 10% instead [1].
Key Facts
- Credit Score: To be eligible for a 3.5% down payment, borrowers generally need a credit score of 580 or higher. However, if your credit score falls between 500 and 579, you may still qualify but will need to put down 10% instead.
- Debt-to-Income Ratio: Lenders typically require a debt-to-income ratio (DTI) of less than 45%. This means that your monthly debt payments, including your mortgage, should not exceed 45% of your monthly income.
- Income Verification: You will need to provide documents such as pay stubs, federal tax returns, and bank statements to verify your income.
- Loan Limits: The loan amount you borrow must be within the FHA loan limits for your area. These limits vary depending on the location.
- Primary Residence: The property you are purchasing must be considered your primary residence and cannot be used as an investment property.
- Appraisal: The house must be appraised by an FHA-approved appraiser.
Debt-to-Income Ratio
Lenders typically require a debt-to-income ratio (DTI) of less than 45% [2]. This means that your monthly debt payments, including your mortgage, should not exceed 45% of your monthly income [2].
Income Verification
You will need to provide documents such as pay stubs, federal tax returns, and bank statements to verify your income [3].
Loan Limits
The loan amount you borrow must be within the FHA loan limits for your area [4]. These limits vary depending on the location [4].
Primary Residence
The property you are purchasing must be considered your primary residence and cannot be used as an investment property [5].
Appraisal
The house must be appraised by an FHA-approved appraiser [6].
Sources
[1] https://www.bankrate.com/mortgages/fha-loan-down-payment/
[2] https://www.rocketmortgage.com/learn/fha-loan-down-payment-requirements
[3] https://www.fha.com/fha-down-payment
[4] https://www.fha.com/fha-down-payment
[5] https://www.fha.com/fha-down-payment
[6] https://www.fha.com/fha-down-payment
FAQs
What credit score do I need to qualify for a 3.5% down payment on an FHA loan?
You generally need a credit score of 580 or higher 1.
What is the maximum debt-to-income ratio allowed for an FHA loan?
The maximum DTI is typically 45% 2.
What documents do I need to provide to verify my income?
You will need to provide documents such as pay stubs, federal tax returns, and bank statements 3.
Are there any income limits for FHA loans?
No, there are no income limits for FHA loans 4.
Can I use an FHA loan to purchase an investment property?
No, FHA loans can only be used to purchase primary residences 5.
Do I need to get the house appraised before I can get an FHA loan?
Yes, the house must be appraised by an FHA-approved appraiser 6.
What is the maximum loan amount for an FHA loan?
The maximum loan amount varies depending on the location 4.
What are the benefits of getting an FHA loan?
FHA loans have several benefits, including low down payment requirements, flexible credit score requirements, and low mortgage insurance premiums 1.
1 https://www.bankrate.com/mortgages/fha-loan-down-payment/
2 https://www.rocketmortgage.com/learn/fha-loan-down-payment-requirements
3 https://www.fha.com/fha-down-payment
4 https://www.fha.com/fha-down-payment
5 https://www.fha.com/fha-down-payment
6 https://www.fha.com/fha-down-payment