December 20, 2010
How much do I need to make to qualify for an FHA mortgage? That is among the most popular questions about FHA home loans. According to the FHA, there is NO minimum income requirement to apply.
That said, the FHA does require a three-year employment record showing steady income during that time. Note that the requirements don’t say you must have held the same job for three years, only that the income has been reliable.
The fact is, in order to qualify for an FHA home loan, there is no one single determination that gets you approved or declined; the FHA examines a combination of factors to determine an applicant’s overall credit worthiness and ability to pay the FHA mortgage on time every month.
Specifically, the FHA says, “FHA’s mortgage programs do not typically have maximum income limits for qualifying, although you must have sufficient income to qualify for the mortgage payment and other debts.” That’s according to the HUD publication, 100 Questions And Answers About Buying a New Home.
Income limits do come into play in other areas of the FHA loan process. For example, if you’re applying for down payment assistance or secondary financing programs you must certify your income. For some programs, too much income disqualifies the borrower from that particular assistance–not in getting an FHA home loan in general.
Many first time home buyers want to know, “How much do I have to make to buy a home selling for $X,000,000?” The question they should be asking instead has to do with their debt to income ratio. How much money does the buyer make per month and how much of that amount are they using to pay their bills and other monthly obligations? The debt to income ratio is one of the most important figures in the FHA loan application.
First time home buyers often feel at a loss to decide if their current obligations will let them afford an FHA home loan. That’s why the FHA encourages house hunters to take counseling classes on debt, home buying and credit management.
How much home can you afford? Filling out this simple form can go a long way toward helping you answer that question.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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