August 8, 2014
Do you know who is considered legally eligible to apply for an FHA home loan?There are many myths about FHA home loans. One type of myth involves the basic eligibility for an FHA mortgage.
Some mistakenly believe the FHA is only for disadvantaged or low-income borrowers. There may be an assumption about a maximum income limit that is not true, and others may assume that the FHA program is only for those who have never purchased a home before.
The truth is that any borrower who can qualify with credit scores, debt-to-income ratios and other financial data is able to apply for an FHA mortgage loan. What does the FHA loan rulebook (HUD 4155.1) say about the basic eligibility requirements for an FHA mortgage?
According to Chapter Four of the rulebook, “FHA insures mortgages made
• to individuals with valid Social Security numbers (SSN), and
• under the conditions described in this section, to state and local government agencies, and approved nonprofit organizations.
Note: Employees of the World Bank, foreign embassies, etc., may not be required to have an SSN. Conclusive evidence of this exception must be provided.”
Additionally, “When determining the creditworthiness of borrowers, coborrowers, or cosigners, the underwriter considers their
• income
• assets
• liabilities, and
• credit histories.”
There is no maximum age limit for a borrower, and the only minimum age requirement listed in the FHA loan rulebook is that the borrower be of legal age in order to make a legally binding agreement and sign a legally binding contract.”
What about residency requirements? FHA loan rules state clearly, “U.S. citizenship is not required for mortgage eligibility. The lender must determine the residency status of the borrower, based on
• information provided on the loan application, and
• other applicable documentation.”
Borrowers may, with proper documentation, be lawful permanent resident aliens or non-permanent resident aliens.
For more information on any of these rules, discuss your needs with a loan officer.
Do you have questions about FHA home loans? Ask us in the comments section. You can get information about applying or getting pre-approved for an FHA loan at FHA.com, a private company and not a government website.
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.
Browse by Date: