If you are thinking of buying a home in the near future you may want to consider the FHA Home Loan as your financing option. You could save considerable amount of money with this type of loan if you can meet the FHA Loan Qualifications. Because of some strict guidelines set by the federal government not everyone will qualify for this type of home loan.

Most of the people that use a FHA loan to finance their home are first time home buyers. This is because of the low down payment required and less restrictive credit requirements than conventional loans. But, there are certain qualifications you have to meet before you can get FHA Home Loan.

The first FHA Loan Qualifications is you have to live in the home you are going to purchase. It has to be your primary place of residence. People who are investors can not buy a property with this kind of loan.

FHA has a maximum loan amount for each county in the country and this loan amount is determined by taking into account the living costs and price ranges of the local real estate market.

The amount of down payment required by FHA is currently 3.5 down payment. Most FHA lenders are requiring a credit score of at least 620 in today’s mortgage market. An exception to this 3.5 to meet the FHA Loan Qualifications. But if you have certain types of debts such as student loans then they will allow your debt to income ration to go as high as 45 is one of the lowest down payment requirements in the market. Most conventional loans are now requiring a 20 of closing costs for the buyer but that may be changing to 3% in the near future. Check with your FHA approved lender for any new updates.

Final point, although a home inspection is not required by the FHA you certainly are advised to get one. The federal government does have certain standards that a property has to meet but it is not the same as a home inspection. But if a house does not meet the standards, the seller must have the needed improvements or maintenance repaired before closing or have estimated costs put into an escrow account. If the seller will not make the improvements then there is a good chance you are not going to finance that property with a FHA home loan.

Most of the FHA Loan Qualifications are less restrictive than conventional loans and a FHA Home Loan is certainly easier to qualify for and with the low down payment it may be the only way most people can buy there dream home!

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