What to know about FHA loans
There are several types of new and existing property types that are eligible for FHA loans.
Eligible property types for FHA
- Single-family home.
- Four-unit residential building.
- Manufactured or mobile home on a apartment foundation
Thousands of banks, mortgage companies, mortgage brokers, state finance agencies and credit unions have been approved to process FHA loans. This FHA search function may be used to locate these lenders.
What are the requirements to qualifyTo be eligible for an FHA-insured loan, the borrower must pass certain requirements.
Depending on the state where the property is located, the maximum loan-to-value ratio for an FHA-backed loan is either 97.75 percent of the purchase price or 98.75 percent of the appraised value of the home, whichever is lower.
The temporary maximum loan amount for an FHA-insured loan is 125 percent of the median home value in the metropolitan area or county where the home is located or $729,750 in the nation's most expensive housing markets. The Bankrate feature " FHA loan limits by county" shows the current limits for each county. These limits will revert to previous lower levels at the end of 2008, unless the federal government extends that timeframe or makes higher limits permanent.
Borrower requirements for FHA loan
- Valid Social Security number.
- Proof of U.S. citizenship or evidence of lawful permanent residency or eligibility to work in the U.S.
- A legal U.S. resident..
- Old enough to sign a mortgage in the borrower's home state.
Homeowners who need to refinance a non-FHA ARM but have little or no equity should consider the FHA Secure program, which has somewhat different requirements than other FHA-insured loans.
More information about FHA guidelines may be found on the agency's Web site.
Marcie Geffner is a freelance writer in Los Angeles.