What are the Current Underwriting Guidelines for FHA Loans?
Credit guidelines have been revamped for FHA loans as well as most other types of loans, and even the minimum FHA credit standards are harder to meet in the current market. FHA placed a moratorium on tiered FHA monthly MIP until October 1, 2009. The tiered MIP was tied to credit scores and down payment amount. • A stable 2-year employment record is required. • Must have documentable payment patterns for at least one year for items such as cancelled checks for rent, phone bills, utilities, etc. • Allowable debt ratios are typically slightly higher, at 31%/43%, than the debt-ratio limits imposed for conventional loans. This means your PITI payment cannot be more than 31% of your gross monthly income, and your debt to income ratio cannot exceed 43% of your monthly gross income. • At least two months of cash reserves from the borrowers own funds must be available. • FHA mortgage loan underwriting guidelines require property appraisal. • Credit scores above 620 will most likely qualify easi
