FHA loan requirements 2016

FHA World - FHA loan requirements 2016.

Borrowers may also be eligible for an FHA insured loan on a purchase transaction after 12 months from the completion, discharge, trustee's sale if the borrower meets the requirements for extenuating circumstances Economic Event.

Borrowers with a prior bankruptcy, foreclosure, deed-in-lieu, or short sale may be eligible for an FHA insured loan if the bankruptcy, foreclosure, deed-in-lieu, short sale was the result of a documented extenuating circumstance.

FHA increased the annual MIP requirements.

• revision to the period for assessing the annual MIP
• removal of the exemption from the annual MIP for loans with terms of 15 years or less and LTVs of less than or equal to 78 percent at origination
• increase in the annual MIP for mortgages with terms less than or equal to 15 years and LTV ratios less than or equal to 78 percent at origination
• rescinds the automatic cancellation of the annual MIP collection

For any mortgage with an loan-to-value greater than 90% FHA will assess the annual mortgage insurance premium until the end of the mortgage (life-of-the-loan).

For all mortgages with less than or equal to 90% loan-to-value the annual mortgage insurance premium will be assessed for the first 11 years of the mortgage term.

FHA World - FHA loan requirements 2016

FHA announced a policy change to address risk and strengthen finances. FHA changed the minimum credit scores for new borrowers:

• New borrowers will now be required to have a minimum credit score of 580 to qualify for FHA's 3.5% down payment program
• New borrowers with less than a 580 credit score will be required to put down at least 10%

FHA allows a borrower with a credit score of 580 to buy a home with only a 3.5% down payment. FHA guidelines allows a borrower with a minimum credit score of 580 to buy a home using their own funds or the funds can be a gift from a family member.

Home buyers with a credit score below 580 are required to make a 10% down payment. The down payment funds can belong to the borrower or can be a gift from a family member.

FHA guidelines allows a home buyer with a minimum credit score of 500 up to a 6% seller's concession. The seller's concession must be written into the sales contract.

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Mortgage World Home Loans is an online mortgage company specializing in FHA loans for first time home buyers. To buy a house  with 3.5% down payment and a minimum credit score of 580 using an FHA loan, apply online.

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We look forward to working with you.

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