How to Obtain an FHA Loan for First-Time Home Buyers
- 1). Show proof of steady employment and income to qualify for an FHA home loan. This generally involves having the same employer for at least two years (or working in the same field) and providing your tax returns for the past two years.
- 2). Have few negative remarks on your credit report. Although you don't need excellent credit to obtain an FHA mortgage, lenders will evaluate your credit report and check your rental history. To qualify, buyers must have fewer than two 30-day late remarks on their credit reports for a period of two years.
- 3). Rebuild credit after a bankruptcy. Before applying for an FHA home loan, home buyers must wait at least two years after a bankruptcy. During this time, buyers should take steps to rebuild their credit history.
- 4). Save money for a down payment. FHA first-time home buyer loans require a down payment. Buyers aren't required to have the traditional 20 percent. However, the Federal Housing Administration requires a 3 percent down payment.
- 5). Meet the minimum credit score requirement. To obtain an FHA mortgage loan, your credit score cannot fall below 580.
- 6). Keep a low debt-to-income ratio. While some mortgage lenders offer high-risk loans, your mortgage payment with an FHA home loan cannot exceed 30 percent of your gross income.
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