FHA Loans

FHA loans are mortgage loans that are insured against default by the Federal Housing Administration (FHA). FHA loans are available for single family and multifamily homes. The FHA doesn't issue loans or set interest rates; it just guarantees against default.

What is an FHA Loan?

FHA loans allow individuals expanded qualifying guidelines when compared to a conventional mortgage obtain a loan, especially first-time home buyers. These loans offer low minimum down payments, reasonable credit expectations, and flexible income requirements.

In 1934, the Federal Housing Administration (FHA) was established to improve housing standards and to provide an adequate home financing system with mortgage insurance. Now families that may have otherwise been excluded from the housing market could finally buy their dream home.

• Buy a house with as little as 3.5% down.
• Ideal for the first-time homebuyers unable to make larger down payments.

• The right mortgage solution for those who may not qualify for a conventional loan.
• Down payment assistance programs can be added to a FHA Loan for additional down payment and/or closing cost savings.

Documents needed for an FHA Loan 

Your loan approval depends 100% on the documentation that you provide at the time of application. You will need to give accurate information on:

Employment

• Complete Income Tax Returns for past 2-years

• W-2 & 1099 Statements for past 2-years

• Pay-Check Stubs for past 2-months

Savings

• Complete bank statements for all accounts for past 2-months

• Recent account statements for retirement, 401k, Mutual Funds, Money Market, Stocks, etc.

Credit

• Bankruptcy & Discharge Papers if applicable

• 12-months cancelled checks written by someone you co-signed for to get a mortgage, car, or credit card; this indicates that you are not the one making the payments.

Personal

• Driver’s License

• Social Security Card

• Any Divorce, Palimony or Alimony or Child Support papers

• Green Card or Work Permit if applicable

Refinancing or Own Rental Property

• Property Tax Bill

• Hazard Homeowners Insurance Policy

• A Payment Coupon for Current Mortgage

• Rental Agreements for a Multi-Unit Property

• Mortgage Statement

• Rental Agreements for a Multi-Unit Property or other properties owned

Bankruptcy and FHA Loans 

Yes, generally a bankruptcy won’t preclude a borrower from obtaining a FHA Loan. Ideally, a borrower should have re-established their credit with a minimum of two credit accounts such as a car loan, or credit card. Then wait two years since the discharge of a Chapter 7 bankruptcy or have a minimum of one year of repayment for a Chapter 13 (the borrower must seek the permission of the courts). Also, the borrower should not have any credit issues like late payments, collections, or credit charge-offs since the bankruptcy. Special exceptions can be made if a borrower has suffered through extenuating circumstances like surviving a serious medical condition and had to declare bankruptcy because the high medical bills couldn't be paid.