One of the most significant obstacles any to-be homeowner has to overcome is the massive downpayment they need to make. Some people will have the means to cover that amount, while others will struggle to find the financial means to pay for the downpayment. Fortunately, mortgages such as FHA loans exist to ease this problem. It offers lower down payments, a lower minimum credit score requirement, and more to give would-be homeowners more access to the money they need to purchase the home of their dreams.

That said, if this is the first time you’re hearing of FHA loans or aren’t too familiar with them, you’re in luck. Today, we want to share more about FHA loans, precisely their requirements, to help you qualify for them easily:

1. Minimum Credit Score Requirements

If you’re a first-time homebuyer, have a low credit score, and you’re looking to get a mortgage, big bank loans may not be your best option. Luckily, the FHA loan program caters to those individuals who are generally considered high-risk for banks to approve.

With this type of mortgage, you’ll be able to get a loan despite a lower credit score and with a lower downpayment. However, you must meet a minimum credit score of 500 or higher.

2. Maximum Debt Ratio

The primary goal of FHA loan programs is to help ease the burden of home buying for low-income families and first-time homebuyers. To do this, the guidelines for traditional loans from the FHA and Fannie Mae are different from one another.

With FHA loans, you’ll be able to purchase a home with a maximum debt ratio of 43 percent. This means your total monthly debt load must not exceed 43 percent of your gross monthly income. With a 30-year fixed-rate loan, this means a maximum of $1,150 per month per $100,000 of your loan. The lender must verify all debt accounts.

3. Income Requirements

While banks require borrowers to have at least an eight percent downpayment, the FHA loan program allows you to put down just three percent. However, despite this seemingly huge advantage, your monthly gross income must be approximately 3.5 times the total monthly mortgage payment.

4. Property Value

One of the greatest myths about FHA loans is that it only applies to lower-valued homes. While the program does provide certain advantages to borrowers who intend to purchase properties that are lower in value, this isn’t true. In fact, the FHA loan program has an upper limit of $729,750, which is the highest of any home loan program in the industry.

Another myth is that the FHA loan program only applies to newly-constructed homes. This isn’t true, either. With this program, you can purchase any type of property, including anything from a house to commercial real estate.


There are a bunch of other loan requirements that you will need to fulfill, all of which you can learn from FHA lenders. Regardless, understand that FHA loans are some of the best ways to access the money you need to purchase the home of your dreams, thanks to its more lenient requirements. However, always remind yourself that you need to pay the money back no matter how easy it is to borrow money. Working with a reputable lender can allow you to work out a deal that not only gives you the money you need but also sets up a payment plan that you can actually afford! 

NetLending is a wholesale mortgage broker in the US, offering a one-stop-shop solution to all those looking to secure a mortgage quickly. If you are looking for FHA home loans, get yours from us today!