January 16, 2015
A reader asks, “I wanted to know if I can qualify for any of FHA products for first time homebuyers:
-My wife owns a home in her name only.
-I am not listed anywhere on the deed, title, loan, etc
-We currently live in her 2-bedroom home, but have outgrown it. We now have 2 kids and my mother is living with us.
We would like to move to buy a new home, in my name only. I have never owned a home, however, my wife and I have been filing jointly for all of our tax returns (her property is listed on all of our tax returns). My wife plans to keep her current home as an investment property. So, do I qualify for a FHA loan, or any of your listed down payment assistance programs?”
FHA home loans are made available by participating lenders who would need to process your application which includes data furnished by the borrower on employment history, current levels of personal debt, and other details.
The lender would pull your credit report and check your FICO scores, financial obligation repayment history and other factors in order to determine whether the applicant is a good credit risk or not.
That information would be used to determine whether you qualify for an FHA home loan. Whether a spouse’s income and other factors are included on the loan for a borrower who wishes to apply in his or her name only would depend on whether the borrower wants to purchase the home in a community property state or not.
Borrowers should know that the FHA does not give first time homebuyer preference to FHA single family home loan applicants, nor does it provide downpayment assistance. The FHA single family loan program requires a lower down payment than many conventional lenders (3.5% compared to 20% or better in some cases) but cannot offer down payment grants.
At one time, non-profit agencies were permitted to offer down-payment assistance, but a piece of legislation signed by President George Bush in 2008 eliminated these programs. Borrowers may be able to speak to a state or local agency about the possibilities of first time home buyer programs in their local area.
Do you have questions about FHA home loans? Ask us in the comments section. All comments are held for moderation.
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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