Don't be surprised at what kind of
loan you qualify for,
With the government loan defaults rising, HUD announced many FHA requirements changed for their home financing initiatives nationally. Several times in recent years, FHA loan requirements were tightened on FHA credit, FHA down payments and maximum LTV limits for cash out transactions. With FHA interest rates falling to record lows, it is imperative that you understand the new FHA requirements and how they could affect your eligibility. HUD has gone to great efforts to ensure that FHA loan guidelines encourage first time home buying, affordable refinancing and much more. For example 1st time home buyers are allowed to use gift funds from friends and relatives as long as the down-payment funds can be documented.
Just a few years ago, HUD announced significant changes to their FHA loan guidelines that would have significant impacts for several FHA loan programs. After being battered by loan defaults for consecutive years, HUD increased the amount
of home equity required for cash out loans to 15%. Previously, FHA only required borrowers to have 5% equity in their home. The maximum loan to value allowed on cash out loans is 85%. In this volatile market, FHA loan requirements have been changing frequently so check with a loan consultant from time to time if you are shopping for mortgages online. Find out if you are eligible for FHA financing, because FHA rates are more affordable than ever.
Updated FHA Loan Guidelines for Home Buying or Refinancing
FHA credit score minimums have been implemented by many FHA lenders, so check with your loan officer about your qualifications and eligibility for FHA loan programs. The other significant change that HUD made was raising the down-payment requirements from 3% to 3.5%. Requirements for FHA loans continue to be appealing for 1st time home buyers, underwater homeowners and people with bad credit, so take a few minutes and compare quotes from leading FHA lenders.