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| Home» Qualifications-2011 |
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FHA Qualifications 2011 |
FHA keeps on changing its qualifications requirements for major loan programs. Certain policy changes in 2010 are definitely going to show an impact in 2011. The premium rates have been raised, which will make monthly insurance premiums a bit more expensive. According to an analysis, an average borrower may need to pay an additional $30 each month as a result of these changes in FHA qualification guidelines. The upfront insurance premiums payable at closing have also been modified for certain programs. However, these are still under the three percent as required under the Housing and Economic Recovery Act of 2008.
FHA Qualifications for Condos
FHA Condos refer to the building projects that have been approved by the United States Department of Housing and Urban Development either through DELRAP or HRAP approval processing. It is important to check the approval status of a condominium as FHA loans are available for approved condos only. This can be done by visiting the website https://entp.hud.gov/idapp/html/condlook.cfm. In a situation when there is a conflict between HUD guidelines for Condos and State Law, the project must be handed over to jurisdictional Homeownership Center for HRAP processing. As far as the lender is concerned, he must check the condominium approval list on FHA Connection before accepting an application for financing.
FHA Qualification Score
FHA qualification score has been put at 500 for most loan programs. However, to avail the minimum down payment requirement, which is 3% in most cases, and maximum loan amount, one must have over 580 FICO credit score. Even this is not enough to obtain a home loan from a lender like Bank of America or Chase Bank, who generally put qualification standard over 640 FICO. The possible way out of this situation is to shop around and find a lender that accepts your low credit score while not keeping up other qualification requirements.
FHA Qualification Ratios
A debt-to-income ratio is nothing but a comparison between your monthly income and liabilities. To calculate such ratios your gross income is taken into consideration and there exists a calculator than can help you do so. There are two kinds of debt-to-income ratio. One takes into account only your mortgage-related debt and the other considers all debts and credit line, which are known respectively as front-end ratio and back-end ratio. The front-end ratio should not be more than 29 percent whereas the back-end ratio must be below 41 percent to meet the qualification guidelines of FHA-insured loans.
Website: www.hud.gov
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