July 30, 2014

FHA Loan Requirements: Credit Guidelines for Lenders and Borrowers

If you are planning to apply for a mortgage loan, one of your choices is FHA loan. This loan is insured by the Federal Housing Administration (FHA). FHA is considered as the largest insurer of mortgage loans all throughout the world as it has already insured millions of properties ever since it was created in 1934. If you are planning to apply for it, you have to know the different FHA loan requirements most especially in terms of credit.

Before a loan is approved, the lender will analyze the borrower’s integrity via his past credit performance. People with good credit history which is shown by a record of payments made on time have higher chances of getting qualified. On the other hand, those with bad credit history shown by slow payments and delinquent accounts have lesser chances of getting approved.

FHA Loan Requirements: Credit History

When it comes to FHA loan requirements on credit, the following should be considered.

No Credit History

When you are applying for a FHA loan, you should note that it is important to show 2 lines of credit. However, if you don’t have enough credit on your report, then your lender might allow you to submit substitute forms.


You can still apply for a FHA loan even if you have experienced bankruptcy. However, you should submit your application 2 years after the time you were bankrupted. And, you will also need to provide a full explanation. You should also qualify financially and should have already re-established a good credit as well as you should have a stable job.

Late Payments

When the credit history of a certain borrower is being reviewed, it is usually the overall pattern which is being considered. If there is a pattern of good payment even when they are late ones, the borrower can have a chance of getting approved.


There are also FHA loan requirements and guidelines when it comes to property foreclosures. Those with foreclosed properties within the past 3 years are not qualified for FHA insured mortgages. There are some exemptions though such as when the foreclosure was caused by extenuating circumstances.

Collections, Federal Debts and Judgments

Someone can be approved for a FHA loan even when he has not paid his collection as long as it is a minor one. On the other hand, someone who is delinquent on any type of federal debt like student loans, tax liens and others is not eligible. And, someone who has judgments should pay it in full before applying for a FHA loan.

Applying for a FHA loan does not need to be difficult. Consider the previously mentioned FHA loan requirements along with other FHA guidelines and you will not find the process very difficult and time consuming. Also, do not forget to seek the help of our professionals at Community Mortgage. Contact us at (619) 692-3630 for more info.

Share This Story, Choose Your Platform!