Government Loans: Qualifying for an FHA or VA Loan
There are government loan options that make borrowing for a home purchase more affordable for certain buyers. Home Loan Solutions facilitates two types of government loan transactions, Federal Housing Administration (FHA) loans and Veterans Affairs (VA) loans.
FHA loans are appealing for a variety of reasons, including flexible credit requirements, high loan-to-value allowance on refinances and low down payments on purchase loans.
To qualify for an FHA loan, you must have:
- A steady employment history, with consistent income for the past two years
- Good credit: ideally, a FICO score of 620 or higher
- A 3.5% down payment
Qualifying for an FHA loan is easier than qualifying for a conventional loan. Regardless, borrowers must be able to afford their monthly mortgage payment. With an FHA loan, your documented income must demonstrate your ability to make a mortgage payment that is approximately 57% of your total monthly gross income, under certain circumstances.
For veterans of the United States military, VA loans offer the opportunity to purchase a home on very flexible terms. The advantages to VA loans include no monthly private mortgage insurance requirement, flexible qualifying and 100% financing (for some buyers).
To qualify for a VA loan, you must have:
- Veteran eligibility: be a veteran, active duty personnel, reservist/National Guard member or surviving spouse
- Good credit: As of 2009, the minimum FICO score for a VA loan is 620
- An appraisal of the home you plan to purchase, conducted by a VA-assigned appraiser
- A notice of value figure lower than the purchase price of the home, if you wish to obtain 100% financing (buyers must make up the difference in cash)
Qualifying for a VA loan is slightly more difficult than in years past, but it is still an affordable mortgage option for many veteran buyers.
To learn more regarding qualifying for an FHA or VA loan, contact Home Loan Solutions today.