November 14, 2017
Do first time home buyers have different FHA loan requirements? This question is tricky because it’s easy to forget that there are FHA loan requirements but lender standards, state law, and other factors will also have a say in how your home loan is handled.
What follows is a discussion about FHA loan program requirements-you may find that your chosen participating lender has additional rules and procedures which also must be followed.
FHA Home Loans Are Not Just For First-Time Home Buyers
The FHA home loan program is not specifically designed for one type of borrower. That means that borrowers across a diverse range of home owning experience, income brackets, and careers may be eligible for an FHA mortgage, refinance loan, or reverse mortgage. The fact that you have owned a home before-or that you haven’t-isn’t a consideration for basic FHA loan eligibility.
FHA Home Loans Feature The Same Credit and Income Requirements For All Applicants
There is no disadvantage for those who have owned property before, fall into a certain income bracket, etc. Your basic FHA loan application requirements for FICO scores, debt-to-income ratios, down payments, and other issues will not change based on your status as a first-time borrower or an experienced home owner.
FHA Mortgages Have Occupancy Requirements
The FHA loan program is specifically intended for owner/occupiers which means at least one borrower obligated on the mortgage must intend to live in the home as her primary residence. A non-occupying co-borrower situation is permitted, but FHA loan rules state that occupancy must be established within a reasonable time after the loan closes.
That “reasonable time” is generally 60 days, though you may be able to negotiate a different occupancy date with the lender depending on circumstances. What is not permitted is the purchase of a house you won’t occupy as your home.
Requirements in this area may be different for government agencies or non-profits-speak to your loan officer if you need further information on those details.
Participating FHA Lenders May Offer Incentives For First-Time Home Buyers or First-Time Home Loan Applicants
Your participating lender may have a program for first-time buyers. There may also be state or local programs for people who fit into this category, and it is a very good idea to explore your local area for programs of this nature. But the FHA itself does not feature these programs, and the FHA guidelines remain the same without regard to your status as a new borrower (where applicable).
It’s always good to ask your loan officer what programs might be open to you if you are a first time mortgage borrower-that financial institution may have something for people in your circumstances. But those are decisions left to the lender, not mandated by the FHA.
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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