FHA Loans Eligibility Requirements

FHA loans are a response to the dwindling economy of ours. Millions of foreclosures are happening right now. There is an urgent need for the government to try and stop this from avalanching into another major economic crisis. Thus, the FHA has been mobilized and given a shot from the Obama bailout fund.

FHA housing loans


For those looking for FHA loans in order cut back on their financial problems here are some of the eligibility requirements:

* The potential borrower should be able to qualify for the FHA loan.

* As with usual mortgages, the FHA approved lender needs to verify whether or not the borrower meets the qualifications by looking into the borrower’s assets, other debt load, income, and credit history.

* As usual, there is an income limitation. Those who can actually afford to pay the monthlies as computed against their other monthly expenses will be qualified.

* The borrow should have a valid U.S. social security number since only United States citizens that are of legal age can obtain an FHA loan mortgage.

* Even though there are no minimum FICO score requirements in order to qualify for an FHA loan, one’s score will still be the basis for the exact interest rate that will be given.

Remember that the FHA will look for good candidates. Even though nearly everyone can get these loans, there is still a certain kind of person that the FHA prefers to give loans to and that would be a great fit for the program. The FHA is a great option for people who are getting home loans for the very first time. This is because the down payment requirement is not so high as compared to other mortgage deals. FHA loans down payments usually just require the borrower to pay 3 percent of the amount of the entire mortgage.

A Look Back at the Great Depression and FHA Loans

Back in the day that it was formed, the Federal Housing Administration has always been designed to cater to the middle and low income families who need loans. This is no surprise since the Federal Housing Administration or FHA was created during the great depression when millions of Americans were all in the brink of bankruptcy and people where loosing nearly everything.

One can just look back at the Great Depression and truly feel the suffering of the American people during those times. There are many pictures documenting how people gathered in the streets to get food and one day hiring jobs. There were also a lot of rich people who were severely damaged by that economic depression. A lot of companies sunk down to the abyss and the many business men, in their great dismay, even took their own lives as a consequence of the unbearable loss.


FHA loan mortgage

Now, we are sort of seeing a repeat of what happened all those years ago. Now, the degree of poverty might not exactly be the same, but the general blow to the economy, they say, is just as big. Millions and millions of U.S. citizens are jobless and homeless. There are many businesses that are closing down. Foreclosure signs are as common as daisies. Bankruptcies are going on left and right. The Obama administration is doing something about this mess of an economy handed to them by the Bush administration. The Obama bailout program is injecting money to the FHA in order to provide people with a loan that they can get despite their credit score or income.

This is the FHA loan. These are loans that insured by the federal government. That means that if the borrower defaults on this loan, the FHA is going to pay the bank or private lender to cover the balance.