FHA Loan Requirements for 2010

Are you planning to buy your first home in 2010? If so, you might want to look into FHA loans as a financing option. There are several key benefits to this mortgage program, and we will discuss each of them below. We will also talk about the guidelines and requirements for the FHA home loan program, and how to apply for a mortgage through the program.

What is an FHA Home Loan, Anyway?

The Federal Housing Administration is part of the federal government, first launched back in 1934. That’s right history buffs — during the Great Depression. In fact, it was created in direct response to the housing crisis that occurred during the Depression.

The primary role of the Federal Housing Administration is to insure mortgage loans made by private lenders. By offering this insurance, the government lowers the risk for the lender. As a result, home buyers can get approved for an FHA home loan with less money down (when compared to a non-FHA mortgage).

The program offers other benefits as well, which you can find below. You can also find an overview of FHA loan requirements and guidelines for 2010 listed below.

Benefits of the Program

I’ve touched on the primary advantages of these mortgages earlier. Let’s take a closer look at these benefits:

• Buyers can put less money down when they buy a home with an FHA home loan, as compared to a traditional non-FHA mortgage. You can make a down payment as low as 3.5% of the loan amount. This obviously appeals to first-time buyers who have no money from a previous home sale.
• Generally speaking, it is easier to qualify for an FHA loan than a “regular” mortgage. This is a direct result of the government backing / insurance we talked about earlier. So you could get one of these loans even when your credit score (or some other factor) prevents you from getting a regular mortgage.
• The overall cost of your mortgage may be less with an FHA loan, because they generally come with competitive interest rates. This is not always true, but in most cases it is. Since these loans are insured by the federal government, lenders are willing to offer lower rates to borrowers — even to borrowers with less-than-perfect credit.
• Recent trends also suggest that homeowners with FHA loans have better protection against foreclosure. Our recent economic recession put a lot of people into foreclosure, and it led to various government programs designed to help struggling homeowners. Many of these programs focused on people with FHA home loans.

So those are the key benefits. Now let’s move on to discuss the 2010 requirements for this unique mortgage program.

FHA Requirements and Guidelines

What does it take to get one of these loans? Can anybody apply for one? How does the application process work? Those are the questions we will address in this section. Here are the general FHA loan requirements and guidelines for home buyers.

• You must meet certain credit score qualifications established by the FHA. These qualifications change over the years, so I cannot list them here. You can learn more about them by contacting an FHA-approved mortgage lender.
• You must be able to cover the upfront cost of the mortgage insurance, as well as the annual premium. The lender will measure your income to determine this.
• There are also certain debt-to-income guidelines that borrowers must meet. This is a comparison of your overall debt relative to your net income (take-home pay). They review this ratio to prevent people from taking on too much mortgage debt.
• There are other FHA loan requirements and guidelines besides the ones listed above. Want to find out if you meet these guidelines? Here’s an easy way to find out:

I hope you’ve found this article helpful, and I wish you all the best in your home buying process. Good luck.

Disclaimer: We have done everything possible to ensure that this information on FHA loan requirements is accurate. But the program guidelines change over time. To get the most accurate and up-to-date information, you should speak with a HUD housing counselor. You can find one on this page of the HUD website.

Related article: How to apply for these loans

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