January 3, 2012
We get plenty of reader questions in the FHANewsBlog.com comment section, which we’re always happy to answer as best we can. One of the most recent questions was about basic qualifications for an FHA guaranteed loan:
“My girlfriend and I have lived together for about 9 and a half yrs in a rural area 15824 of Penn…She has a low paying job as a waitress but, has worked there since she graduated high school. Ive been at my current position for a little under a year and make a little more than she does.”
“The only debt we have is my school loan. I do not know my current credit score and she has good credit. I feel that as a couple we might be able to afford a home but im not sure…We are only curious if we/or one of us would qualify for a FHA loan.”
Questions like this are quite common–and unfortunately too general to answer properly. The reason for this is because the FHA loan rules are designed to address individual circumstances on a case-by-case basis rather than apply a single, inflexible rule on all applicants.
Participating FHA lenders must examine both the credit history and score, but also current and past employment and the record of on-time bill payments in order to arrive at a decision on an FHA loan application. The lender must decide if the borrower is a good risk based on that data.
FHA rules do require some minimums on factors such as overall employment, but even these can be flexible depending on the right circumstances. Individual borrowers may have additional compensating factors (including cash reserves, investments or other assets) that could offset not meeting some other requirements such as time spent at a particular job. In some cases a lack of employment history
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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