WHAT IS AN FHA LOAN?
An FHA loan is a type of loan from the Federal Housing Association backed by the U.S. Department of Housing and Urban Development. FHA loans are helpful for buyers with limited savings or lower credit scores.
You’ll need to satisfy a number of requirements to qualify for an FHA loan. It’s important to note that these are the FHA’s minimum requirements, and lenders may have additional stipulations.
CREDIT SCORE
The minimum credit score for a FHA loan is 600.
DOWN PAYMENT FUNDS
If you have a credit score of 600 or higher, your FHA down payment can be as low as 3.5%.
DEBT-TO-INCOME RATIO (DTI)
The FHA requires a DTI of less than 50, meaning that your total monthly debt payments can’t be more than 50% of your pretax income. This includes debts that you aren’t actively paying. For student loans in deferment, your FHA loan underwriter will include 1% of the loan’s total as the monthly payment amount.
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