Approval

• For a prospective buyer to be able to sign on the dotted line and become an official home owner requires that the lender screen him in regard to FHA qualified borrower standards. But this only one half of the FHA approval process. For that buyer to then use his loan to purchase a house means that the particular property must be approved as well. If deficiencies are noted in the inspector's report to the lender, they must be corrected before the purchase can go forward.
  
  

Loans

• The criteria for receiving an FHA approval on your loan have been written in a wide, general sense, allowing the lender latitude to make exceptions. They like to see two years of steady employment and an appropriate mortgage payment to income ratio for the house you want to buy. Any bankruptcy needs to have been at least two years in the past, and any foreclosure on your record must be at least three years old. Defaults or delinquent credit payments should to be brought up to date.
  
  

Properties

• To qualify for the FHA loan program, a property must be inspected by an FHA-approved inspector. While FHA loan qualifying standards are less stringent than conventional qualifying, the reverse is true when it comes to property appraisals, which are often more strict than than their private market counterparts. To be approved for purchase with FHA backing, the house must be structurally sound, free from wood rot, termite infestation and present no health or safety conditions for the occupant.
  
  

Down Payment

• While conventional mortgages require 20 percent or more for a down payment, the FHA standard is much lower. To receive an FHA approval requires that the buyer be able to put 3 percent of the purchase price down in cash for the sale to be finalized. He also will be required to pay upfront fees that add up to about another half percent, which means the loan is written for about 96.5 percent of the sale price. Compared to private sector financing, this is a good deal.