FHA Loan FAQs

A mortgage loan that's insured by the Federal Housing Administration (FHA). Here's a blog that explains more.

Qualifications for an FHA Loan include but are not limited to:

• Having a valid Social Security number and being a legal resident of the United States
• Steady employment history
• Minimum 580 credit score
• FHA loans are only available for a primary residence
• The property must be appraised by an FHA-approved appraiser and needs to meet certain standards
• The front-end ratio (mortgage payment plus homeowners association fees, property taxes, mortgage insurance, home insurance) will need to be less than 31% of your gross monthly income
• The back-end ratio, which includes the front-end items plus monthly debts (credit card payments, car payment, student loans, etc.), needs to be less than 43% of gross monthly income
• Prior foreclosures need to be seasoned over 36 months and borrower must demonstrate re-established good credit
• Chapter 7 Bankruptcies must need to be seasoned over 24 months from the discharge date
• Active Chapter 13 Bankruptcies must be seasoned 12 months of satisfactory payments and receive written permission from bankruptcy court to enter into a mortgage transaction 

This blog has more information.

To pre-qualify for an FHA loan, you'll need:

1. Verifiable income.
2. Ability to afford the housing payment and any existing debt.
3. Have at least 3.5% for a down payment.
4. Have an established credit history. 
6. Find a home that doesn't exceed FHA loan limits.
7. Begin the application process.

Here's a blog that has more information.

Here's six steps to follow to apply for an FHA loan:

• Start the pre-approval process - Sellers take you more serious if you are pre-approved for a loan.
• Fill out a loan application - In most cases, you will fill out the Uniform Residential Loan Application after you’ve made an offer on the house.
• Appraise the property - An FHA-approved appraiser will need to assess the market value of the property to make sure it aligns with the offer. 
• Begin mortgage underwriting - The lender with work as a liaison between the borrower and the underwriting, gathering information on your financial situation, including credit score, income, and provided documentation. 
• Receive a decision - If all qualifications are met, your loan application will be approved. 
• Closing process - This includes reviewing the loan documents to ensure accurate information has been captured. Closing costs will also need to be paid at this time.

Read this blog for more information on applying for an FHA loan.

No. The FHA insures loans, but they don't actually originate home loans.

Typically, you can qualify for these loans with a 3.5% down payment. The mortgage insurance percentage on FHA loans tend to be higher than for non-FHA mortgage types. For some borrowers, this is more manageable since the insurance payments are spread out, and the upfront costs can be lower.

Because the loan is guaranteed by the FHA, low to moderate income families can qualify for home loans without the strict financial restrictions other loan types impose.

No.

Typically, borrowers need to be at least 3 years out of foreclosure and have re-established good credit before they can qualify for an FHA loan.

Typically, borrower needs to be at least two years out of a bankruptcy and have re-established good credit before they qualify for an FHA loan.

It will depend on the amortization schedule and your loan to value (LTV) ratio on your loan origination date.

FHA mortgage limits can be found on the HUD website at https://entp.hud.gov/idapp/html/hicostlook.cfm.

Yes! NASB is approved by the Federal Housing Authority to help you get an FHA loan.

FHA stands for the Federal Housing Administration. They provide mortgage insurance on loans made by FHA-approved lenders and insure mortgages on single-family homes, multifamily properties, residential care facilities and hospitals.

If you've gone through a bankruptcy, you will have to wait at least one year after filing Chapter 13, and at least two years after filing Chapter 7 bankruptcy before you can apply. Your debt-to-income (DTI) percentage will also need to be in the acceptable range; the maximum DTI to qualify for an FHA mortgage is 31%.

Documentation you may need for an FHA  conventional loan includes but is not limited to the following:

• Two years full tax returns if self-emloyed - all pages and all schedules
• Two years W2s
• Two most recent pay stubs with year-to-date pay
• Two most recent asset statements - all pages with full transaction history
• Copy of your mortgage statement if you currently own
• Bankruptcy and discharge papers (if applicable)
• Copy of Drivers License

A minimum down payment of at least 3.5% is typically required for an FHA loan. There may be and local programs that offer assistance to home buyers who need financial aid. 

Yes, but must come from a family member. 

HUD requires your home to meet minimum standard of living and safety requirements. Building violations or inoperability of electrical, plumbing and HVAC systems can affect property eligibility. 

Click here for a calculator that can determine what your FHA loan payments will be based on your purchased price, down payment, term, and interest rate.

A minimum loan amount of $175,000 is required to apply. Exceptions include mortgage products for properties located within the Greater Kansas City metro and surrounding areas. Contact a NASB Loan Officer for details on the excluded areas and/or zip codes.