FHA loans are by far one of the most popular mortgage loans available in Georgia today. The Federal Housing Administration (FHA) loan mortgage is great for Atlanta area home buyers that want to purchase a home with little money down. The program offers GA residents the option of purchasing a home with only a 3.5 percent down payment. Here are the documentation and credit requirements needed to be approved for an FHA home loan. We will also look at some of the program benefits.
FHA Documentation Requirements:
Most of the general information needed to start will just be basic things you already know. However, in order to work up a complete loan approval, lenders will need the following:
- The residence address where you have been living for the past two years
- Social Security numbers for all borrowers on the application
- Name and location of your employer(s) for the past two years, gross monthly salary. 2 years of consistent income. While you do not need to be at the same job for 2 years, we must be able to verify a 24-month job history. Gaps in employment can be explained, however, those need to be kept at a minimum. The current income statement and personal tax returns from the past two years must be presented to the lender at the time of asking. In addition to that, individuals who are self-employed will be required to present their balance sheet.
- Information pertaining to the checking savings accounts and any other asset accounts.
FHA Credit Requirements:
FHA home loans provide the home buyer a chance to buy their first home with a low down payment. However, your ability to qualify for FHA-approved loans significantly depends on your FICO credit score. In recent years the FHA has made changes to its policies that affect the ability of an individual to buy a home. Currently, applicants must have a credit score of at least 620 in order to qualify for the max 96.5% financing. Some borrowers with lower credit scores can qualify with a larger down payment.
FHA Requirements Recap:
- Steady employment for at least two years
- A valid social security number
- U.S. residency
- Two years out of bankruptcy and four years out of foreclosure with good credit
- A 3.5 percent down payment – can be in the form on a gift
- A 620 minimum credit score
- A monthly payment must not exceed 35 percent of gross monthly income
- Monthly debt must not exceed 45 percent of gross monthly income
Atlanta FHA Mortgage Highlights:
- Generally easier to qualify than conventional loans
- Lower down payment requirements, 3.5% compared to 5% for conventional loans
- The home seller is permitted to pay buyers’ closing costs
- Safe 30-year fix payment terms
- Lower credit scores permitted
- Generous loan amount limits, FHA Loan limits specific to the county
- FHA streamline refinance options available for all borrowers with an FHA loan
Home buyers in more rural locations in GA should also check into the USDA Mortgage here. The USDA program offers up to 100% financing in many locations just outside of the big cities. Please call us above, or just submit the Quick Form on this page for assistance.
Serving home buyers in all across the U.S. including metro Atlanta – Fulton, DeKalb, Gwinnett, Cobb, Clayton, Coweta, Douglas, Fayette, and Henry County.