The Federal Housing Administration offers a loan program which is more flexible than the other loans available in the market. This loan is preferred by first time buyers or those with not an impressive credit history because the FHA lending policy doesn’t depend on the credit reports that are created by the leading credit report agencies.
Also, the interest on these loans is less than the other loans available in the market. Before availing for the loans for buying a house it is better to find out in details about the eligibility criteria, the minimum credit requirements, the minimum down payment and the other important details. It is better to do a thorough background check before zeroing on a particular loan program.
Basic Eligibility Criteria for the FHA Loans
- All citizens or legal residents of USA with a valid social security index are eligible to apply for the loan program.
- The loan applicants must be adults. They will have to sign legal documents and have to be old enough to do so.
- The candidates must furnish detailed income information. This information will be verified and if they are considered to be appropriate only then will the candidate be eligible for FHA loans.
- Although there are no minimum income requisite but the candidates must be in a position to repay the loan.
Minimum Requirement For A Credit Report
Credit reports from the three major credit bureaus are required. The candidates must be in a position to furnish detailed reports of their credit history along with a detailed history of their residence. The information is usually available in the database of the credit reporting bureaus. A few FHA applicants also have to provide a detailed mortgage report, which is also available for these credit report bureaus.
Minimum Down Payment For FHA
Applicants for the FHA loan are required to make a 3.5 % down payment however the loan program allows borrowers to receive down payment funds from families, charities or even as gifts. First time borrowers can also avail certain grants.
Tax Credit For First Time Buyers
Yes, FHA does give tax credit to first time buyers. According to contracts signed in 2010, the Federal Housing Administration offers a tax credit of $ 8,000 for first time buyers and $ 6,500 for buyers who buy repeatedly.
Before availing for loans for buying a house it is better to find out in details about the eligibility criteria, the minimum credit requirements, the minimum down payment and the other important details. Do a thorough background check before choosing a particular loan program.
B. Lyttle is a real estate expert with over 5 years of experience in the real estate industry. She’s a contributor for homesales, which is one of the reputed real estate sites in Australia.