Qualifying for a home mortgage loan can be difficult, near impossible without a sizable down payment and a moderate credit report. If this describes you and you financial position, an FHA loan may be for you! There are fewer restrictions for FHA loan qualification in comparison to a standard mortgage loan. Qualifications for an FHA loan are:
- Proven employment status of at least 2 years.
- Steady or increasing income over a 2 year period.
- History of on-time payment. No more than two missed payments on your credit.
- If you've filed for bankruptcy you must wait at least 2 years and have good credit since you filed.
- Those with foreclosures must wait at least 3 years since the most recent foreclosure.
- Monthly mortgage payment should be roughly 30% of your gross income.
- You must pay a minimum of a 3% down-payment.
- Agree to 2.25% in closing costs
- Only certain properties are eligible - single-family homes, condominiums, double-wide manufactured homes, modular homes and 2-4 unit properties.
- The property must be your primary residence.
These are the basic qualifications for an FHA loan through Holmgren and Associates.
When you're applying for an FHA loan the following list of documents will help expedite the process. We can help you understand any part of the FHA loan process so don't hesitate to contact us with any questions.
- Past two years completed tax returns.
- Past two years W-2's, 1099's and any other necessary tax forms.
- One month worth of newest pay stubs.
- Self-employed will need three years tax returns and YTD Profit & Loss Statement.
- Past three months full bank statements for all accounts.
- Any recent statements from investment accounts (retirement, 410k, mutual funds, etc.).
- Driver's License or other official State identification.
- Social Security Card.
- Any Divorce, Palimony, Alimony Documents.
- Green card or work-permit (if applicable).