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An FHA loan is a specially designed home loan program that allows low to medium-income people to fulfill their dream of having a home. Insured by the Federal Housing Administration and offered by the FHA-approved lenders, you can use this loan to buy a duplex, triplex, fourplex or a condo.
But to get approval for this loan, you need to fulfill some requirements. Do you know what the FHA loan requirements Texas are? Here is what you need to know about the requirements –
The FHA loans are not only for first-time home buyers. Generally, these loans have a more relaxed qualification required than conventional home loans. It makes the FHA an attractive choice to home buyers with lower credit scores or smaller down payments, common challenges that first-time homebuyers face. However, anyone, even a repeat buyer or homeowner looking to refinance a mortgage, cam use this loan as long as they meet the eligibility criteria.
The down payment requirement for an FHA loan is more lenient than traditional home loan programs. But the minimum requirement depends on your credit score. The higher the credit score, the minimal the requirement will be. With a 580 or higher credit score, the minimum down payment requirement is 3.5%. But with a credit score of 500 to 579, the minimum down payment requirement is 10%. But the requirement can vary from lenders to lenders. So, ask your lender about this before you proceed.
Lenders pay attention to your debt-to-income ratio, regardless of the type of mortgage that you get. The debt-to-income ratio, also familiar as DTI, measures the percentage of your pretax income, which you spend on monthly debt payments. In order to have a firm idea and figure out where you stand, you can use a debt-to-income ratio calculator. Generally, the FHA requires a ratio of around 50%, but it can vary based on your credit score and other factors.
There is no particular maximum or minimum income requirement that homebuyers need to earn to qualify for an FHA home loan program. But before giving the approval, the mortgage lender wants to ensure that you have at least two established credit accounts, account for cash gifts that help with the down payment, and not have delinquent federal debt or judgments, or debt associated with past FHA-insured mortgages.
To qualify for an FHA home loan program, documentation is a must for you. General documents that you need are proof of your Social Security number, original pay stubs, W-2 forms, or valid tax returns. You can need other documents too. However, an FHA –approved lender will let you know about these is any such requirements.
These are the general requirements that you have to fulfill. Now, opt for an FHA-approved lender and apply for the loan today.