How to Qualify for FHA Loans in 2009

Reader Question: I have heard that FHA home loans are perfect for home buyers who don't have a big down payment, like myself. Is this true, and how do I qualify for a loan like this?

You have heard correctly. A mortgage loan that is insured by the Federal Housing Administration (FHA) is usually easier to qualify for than a non-FHA loan. For example, if your credit score is too low to get a mortgage through a lender in the standard fashion, you might find that you qualify for an FHA loan through that same lender. You can also get approved with less money down, which is perfect for first-time home buyers who don't have a lot of cash.

I would like to stress the fact that the government does not actually loan money to consumers. Instead, the insure the loans made by primary lenders such as Wells Fargo, Chase, Citi, etc. So you would still have to apply through a regular mortgage lender to qualify for an FHA loan. And speaking of qualification, here are the general criteria for FHA home loans in 2009 ...

• You'll probably need a credit score of 620 or higher.
• You'll need a down payment of 3.5% or more, in most cases.
• You can only take out a certain size of loan, based on your income.
• Get started here:

You have nothing to lose by applying for an FHA loan through a lender, and it's the only way to know for sure if you can qualify or not. I get endless of emails from people who tell me about their credit scores, their income and debt, and they then ask if I think they are qualified for an FHA mortgage loan. To which I would always reply: "I don't know because I'm not a lender."

For whatever reason, I think a lot of people are intimidated by the mortgage application process. But it's a necessary first step to qualify for an FHA loan -- or any other type of mortgage, for that matter. Even if you don't get qualified, you will at least know what you need to work on (improving your credit score, reducing your debt, saving money, etc.).

Use the link below to get started:


In closing, I would like to point out the difference between qualifying for a mortgage and being able to afford one. Before you even start talking to lenders, you should figure out what your home buying budget is. In particular, you should come up with a maximum amount you can afford to pay toward your mortgage each month.

Believe it or not, it's possible to qualify for a loan that's too big for you. That's how people end up in foreclosure. And if you watch the news, you'll realize that this kind of thing happens all the time. So before you apply for an FHA home loan, find out what you can realistically afford to pay each month.

Here's a related article you might want to check out, written by the folks over at Smart Mortgage Advice: 2009 FHA Requirements

I hope this answers your question, and I wish you well in trying to qualify for a loan. Good luck!