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What is a FHA Loan?

In 1934, the Federal Housing Administration (FHA) was established to improve housing standards and to provide an adequate home financing system with mortgage insurance. Now families that may have otherwise been excluded from the housing market could finally buy their dream home.

FHA does not make home loans, it insures a loan; should a homebuyer default, the lender is paid from the insurance fund.
 

  • Buy a house with as little as 3.5% down.

  • Ideal for the first-time homebuyers unable to make larger down payments.

  • The right mortgage solution for those who may not qualify for a conventional loan.

  • Down payment assistance programs can be added to a FHA Loan for additional down payment and/or closing cost savings.
     

If I’ve Had a Bankruptcy in Recent Years, Can I Get a FHA Loan?

Yes, generally a bankruptcy won’t preclude a borrower from obtaining a FHA Loan. Ideally, a borrower should have re-established their credit with a minimum of two credit accounts such as a car loan, or credit card. Then wait two years since the discharge of a Chapter 7 bankruptcy, or have a minimum of one year of repayment for a Chapter 13 (the borrower must seek the permission of the courts). Also, the borrower should not have any credit issues like late payments, collections, or credit charge-offs since the bankruptcy. Special exceptions can be made if a borrower has suffered through extenuating circumstances like surviving a serious medical condition, and had to declare bankruptcy because the high medical bills couldn’t be paid.

 

What Documents are Needed to Apply for a FHA Loan?

Your loan approval depends 100% on the documentation that you provide at the time of application. You will need to give accurate information on:
 

Employment

  • Complete Income Tax Returns for past 2-years

  • W-2 & 1099 Statements for past 2-years

  • Pay-Check Stubs for past 2-months

  • Self-Employed Income Tax Returns and YTD Profit & Loss Statements for past 3-years for self-employed borrowers
     

Savings

  • Complete bank statements for all accounts for past 2-months

  • Recent account statements for retirement, 401k, Mutual Funds, Money Market, Stocks, etc. 2 month history
     

Credit

  • Landlord’s name, address, telephone number, or 12- months cancelled rent checks

  • Recent utility bills to supplement thin credit

  • Bankruptcy & Discharge Papers if applicable

  • 12-months cancelled checks written by someone you co-signed for to get a mortgage, car, or credit card, this indicates that you are not the one making the payments.
     

Personal

  • Drivers License

  • Any Divorce, Palimony or Alimony or Child Support papers

  • Green Card or Work Permit if applicable

  • Any homeownership papers
     

Refinancing or Own Rental Property

  • Property Tax Bill

  • Hazard Homeowners Insurance Policy

  • A Payment Coupon for Current Mortgage

  • Rental Agreements for a Multi-Unit Property

FHA Loans