FHA Loans FAQ

Is a "first-time homebuyer" the only person allowed to get an FHA-insured loan?
Absolutely not! FHA loans can be used by any person in any circumstances provided that they dont already have another FHA loan.  You can finance a second home or rental property using an FHA loan while you have a traditional mortgage on your current residence.

Are FICO scores used when qualifying for FHA-insured loans?
Currently, the FHA is one of the few institutions that does not use FICO in order to qualify you.  This is a significant advantage for people who may have had some past credit issues that were preventing them from qualifying for a conventional loan.

Am I allowed to refinance an FHA loan?
Of course!  FHA loans are allowed to be refinanced if you are looking to lower your monthly mortgage payment or convert the loan from an adjustable rate mortgage (ARM) to a fixed rate mortgage.

What are the FHA loan rules on rental or income property?
FHA loans may be used to purchase rental property that contains up to 4 units.  However, the loan amount on the rental or income property is not allowed  to exceed the maximum loan limits for the area in which the property is located.

If I have been through bankruptcy can I still get an FHA loan?
If you have been through bankruptcy you may still qualify for an FHA loan as long as it has been 2 years since the bankruptcy took place and you have held an excellent credit record during that time.

If I have a tax lien am I eligible to receive an FHA loan?
As long as you have set up a repayment schedule with the IRS and you have made timely payments for at least six months you may still qualify for an FHA loan.  Any tax liens levied by the state must be completely paid off in order to qualify.

If I have been through a foreclosure can I still get an FHA loan?
If you have been through a foreclosure you may still qualify for an FHA loan as long as it has been 3 years since the foreclosure took place and you have held an excellent credit record during that time.

Once I have 20% equity in my home, can I get rid of the FHA loan?
In order to get rid of the FHA distinction on your loan is to refinance to a traditional loan.  When you have built up at least 20% equity in your home you may refinance the loan and get rid of the FHA distinction.

Is it possible to put no money down and finance the home 100%?
In some cases, it is possible to use an FHA loan in conjunction with other state programs in order to purchase the home with no money down.  Check with your local state government to find out if such programs are available.

Do I have to payy off any outstanding collection accounts before I can receive an FHA loan?
In almost all cases, any judgements against you or outstanding collection accounts must be taked care of before you are allowed to receive an FHA loan.  Speak to a a professional in the mortgage industry about getting pre-qualified before you begin paying off any outstanding debts as there is a chance you may still qualify.

Am I allowed to have a co-signer that does not live with me?
Co-signer's that do not reside in the home are allowed to help you qualify for the FHA loan.  However, their complete financial situation such as any rent, bills, existing mortgage payments, or collection accounts will be considered when qualifying you for your FHA loan.  In addition, the individual co-signing with you is not allowed to have an FHA loan under their name.