FHA loans are a good option for first-time homebuyers who may not have saved enough for a large down payment or borrowers who have suffered from bankruptcy or foreclosures in the past. Requirements are:
- Credit score at least 580 = 3.5% down payment.
- Credit score between 500 and 579 = 10% down payment.
- MIP (Mortgage Insurance Premium ) is required.
- Debt-to-Income Ratio < 43%.
- The home must be the borrower’s primary residence.
- Borrower must have steady income and proof of employment.
Please keep in mind most loan eligibility requirements and guidelines do have exceptions and are reviewed on a case by case basis.