Make payments to your creditors on time. You should have no more than one late payment of 30 days or more delinquent in the past two years (preferably none). If you rent or have an existing mortgage, make these payments on time for at least a year before applying for FHA backing. The FHA is flexible when it comes to your credit score up to a point. If you have a score under 580, you may not be able to qualify or you may have to come up with a down payment of at least 10 percent of the purchase price of the house.
Expect to wait for some time if you have a recent bankruptcy or foreclosure on your credit history. As a general rule, you cannot qualify for an FHA backed loan for two years after a bankruptcy and for three years after a foreclosure.
Establish a stable employment and income history. You should have a steady income for the past two years. Ideally, your primary employment should be with a single employer. Your income should be level over the two years or have increased during that time. Be prepared to document your employment with your employerâ€™s contact information or with pay stubs, W2 forms and copies of your tax returns. If you are self-employed you will need your tax returns for the past three years, plus an up-to-date profit and loss statement.
Select a property within your means. The FHA requires that your mortgage payment be less than 30 percent of your gross (pre-tax) income. Be sure to include and document all sources of household income, not just wages from your primary job.
Contact an approved FHA lender. If you arenâ€™t sure how to locate a lender, you can use the FHA online lender list search facility at hud.gov. Itâ€™s a good idea to talk to a lender before you start the application process with the FHA. Most will be willing to answer questions and help you with the application process.
Obtain the FHA application packet, which is available online at hud.gov or from FHA-approved lenders. Complete the application forms and submit them to the FHA along with the required documentation.
source : http://homeguides.sfgate.com/qualify-fha-backed-loan-2450.html
Broker / Owner of AATRealty