Do FHA Loans Have Income Limits?
FHA guidelines have many rules and qualifications which all must all be met if you plan to finance your home with an FHA insured loan. There are also loan limits and debt to income limits. One of the questions that borrowers ask at times is whether FHA loans have income limits and we will answer that below.
Do FHA loans have income limits? There are no maximum or minimum FHA income limits required to qualify for an FHA loan. Your fully documented income must simply be enough to qualify for the loan without exceeding a debt to income ratio of 43%.
Income Documentation Needed to Qualify for an FHA Loan
FHA loan guidelines are clear that the income for all loan applicants must be fully documented as follows:
- Wage Earners – You must provide recent pay stubs and the last two years of your W2s and Tax Returns.
- Self Employed Borrowers – You must provide the last two years tax returns and possibly a P&L statement for the current year.
If you receive 1099 income, we suggest reading our article on qualifying for an FHA loan with 1099 income. Then, if you are working a part time job, you can read our article on qualifying for an FHA loan with part time income.
Requirements to Qualify for an FHA Loan
- Minimum FICO score requirement of 500
- Minimum down payment requirement of 10% with a FICO score below 580
- Minimum down payment requirement of 3.5% with a FICO score above 580
- Mortgage Insurance Premium (MIP) is required for every FHA loan
- Maximum debt to income ratio of over 50%
- The home must be the primary residence
- The borrower must have a 2-year work history with steady income
If you are unsure whether you can meet the minimum income requirements to qualify for an FHA loan, then click to connect with one of our FHA lenders and they can easily let you know how much you can spend on your new home.
Related Questions
What if my income recently increased?
If you recently had a nice increase in pay or got a new job that pays a lot more, the lender will need documentation of that increase and some assurance that the new income level can be sustained. This could be a letter from your employer or a copy of an employment contract.
What if I am self-employed and cannot document my income using tax returns?
If you are self-employed and show a very low net income or a loss, then you are going to struggle to qualify for an FHA loan. Your best bet at this point would be to apply for a bank statement loan.
What if I do not have two years of steady income?
If you have any gaps in employment or income, you will need to provide an explanation and possibly a letter detailing the reasons for that gap. If you were in the military or were in school, you would need to provide documentation from the military regarding your service and/or college transcripts proving you were in school.
If you still have more questions, then contact us and we will provide you with everything you need to know about FHA loans and whether you can qualify with the income that you have today.
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