A first-time homebuyer or one, who has not owned a home in the last three years? Then, you can apply for an FHA home loan program. A specially designed home loan program for low to medium income group borrowers of the U.S., this loan has helped thousands of borrowers to realize their dreams of homeownership.
However, like any other home loan program, this loan also has some requirements. Do you know what the FHA loan requirements Texas are? Here are a few requirements that you should know about –
- Down payment requirements
The minimum down payment requirement is one of the prime reasons why people like to opt for this loan program. While traditional loans need at least a 20% down payment, for an FHA loan, the minimum requirement is 3.5%. However, it is always advisable for buyers to come with a bigger down payment as it helps to ensure the lowest mortgage rate. Besides, with a low credit score, you need to come with a higher down payment. If you find it difficult to manage the down payment amount, then you can apply for down payment assistance programs or accept gift money from your family members or friends.
- Credit score requirements
Your credit score reflects your creditworthiness. And so, mortgage lenders always prefer borrowers who have a good credit score. But as FHA is a government-backed loan, one can get approval even with a 500 credit score. But as lenders offer approval, the credit score requirements can vary from lenders to lenders. While some lenders offer approval with a low credit score, others may ask for a higher score. Besides, the higher your credit score, the better you have the chance to get the best mortgage rate. So, though it is possible to get approval for an FHA loan with a 500 credit score, you should try to come with a higher credit score for your advantage.
- Income requirements
Your eligibility for an FHA loan does not hinge on a particular income amount. But you need to prove that you have a steady employment history. Your income should be verifiable by sharing pay stubs, federal tax returns, W-2s, and bank statements with your lender. Your mortgage lender can ask for other examples of verifications as well.
- Property requirement
Your home loan should not exceed the loan amount in your area. For lower-cost areas, the FHA’s limit is set at $314,827 in 2019, while in high-cost areas; the limit is $726,525 for 2019. Besides, the home should meet the FHA’s minimum property standards, regarding safety, security, soundness. And when buying a home, you will need to move in within 60 days of closing.
Besides, there are requirements for debt-to-income ratio, documents, and more. Your total monthly debt payment can’t be more than 50% of your pretax income. And you should come with documents like Social Security Number, proof of the U.S, citizenship, legal permanent residency, etc. Fulfill all the loan requirements and ensure fast approval from the lender.