FHA Loan Eligibility

FHA loan eligibility

There are very specific FHA loan eligibility guidelines that borrowers should be aware of when purchasing or refinancing a home with an FHA loan. FHA loans may be the easiest mortgage to qualify for if you are eligible for the program.

This guide will help you to determine whether you are eligible for an FHA loan based upon the following criteria below.

FHA Loan Eligibility Requirements

Borrowers who wish to purchase or refinance a home using an FHA loan must meet the FHA loan eligibility requirements in the following categories:

  1. Residency
  2. Occupancy
  3. Property Types
  4. Employment
  5. Income
  6. Credit Score
  7. Loan Limits
  8. Bankruptcies and Foreclosures


FHA loan applicants must be a US citizen or be a permanent resident alien. In both instances, you must have a social security number. This is the case for all borrowers on the loan including co-signers.


FHA loans are for purchases or refinances for primary residences only which means at least one borrower must live in the home.  You may hold onto a property as an investment, but you need to live in the home for at least one year first.

Property Types

FHA loans can be used to finance 1-4 unit homes, condominiums, and manufactured and mobile homes. You may also purchase raw land if you simultaneously apply for the FHA one time close construction loan and immediately build a home on the property.


Applicants must have a 2 year work history either as a W2 wage earner or self employed. There are some exceptions to the two year rule. A few of these exceptions where the two year requirement can be waived are if you were a full time student, serving in the military, or had an extreme medical condition which prevented you from working.


FHA loans are the most liberal when it comes to income. However, the income must be fully documented using W2s and/or tax returns.  FHA guidelines will allow a debt to income ratio of up to 56.9% which is higher than any other mortgage program.

Credit Scores

FHA loans allow for credit scores as low as 500. The down payment requirement for a 580+ credit score is 3.5%. Scores of 500-579 will require a 10% down payment. Read (FHA Credit Score Requirements)

Loan Limits

The FHA has loan limits (maximum loan amounts) for each county in the United States. Some counties have higher limits than others due to having higher average home sale prices. Your FHA loan cannot exceed the maximum loan limit for your county. Read (FHA Loan Limits Lookup)

Bankruptcies and Foreclosures

There are FHA loan waiting periods set for bankruptcies and foreclosures. This means you cannot apply for an FHA loan until the waiting period has ended. The required waiting period is 1 year after a Chapter 13 bankruptcy, 2 years after a Chapter 7 bankruptcy, and three years after a foreclosure. There are a few exceptions to the waiting period. Read (FHA Bankruptcy waiting period)

Other reasons why you may not be eligible for an FHA Loan

There are other reasons why you may not be eligible for an FHA loan. These are just a few common examples.

  • Delinquent on another FHA loan
  • Delinquent federal tax debt
  • Delinquent on a federal non-tax debt

How to Find Out of You are Eligible for an FHA Loan

After you have reviewed the basic eligibility requirements above, you can check our home affordability calculator to see an estimate of how much you could get approved for.

The next step is to speak to one of our FHA lenders to get pre-approved. This simple process includes a credit pull and your last 30 days pay stubs.  This pre-approval will be for a particular loan amount. Other factors like property type and property taxes may impact your pre-approval.

Other Helpful FHA Resources

How to Apply for an FHA Loan

FHA Home Affordability Calculator



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