There are lots of guidelines, but I'll do my best to hit the major bullet points
FHA does not have a credit score requirement but most lenders will want at least 620. This number ws 580 approximately a year ago. Don't be surprised if it works its way up to 640.
No chapter 7 bankruptcy in the last 2 years. No seasoning for a Chapter 13 from the day of completing the Ch. 13 payoff.
No Foreclosure in the last 3 years
Cannot have defaulted on a Federally backed loan, so a FHA , USDA or VA foreclosure in the past will likely not be allowed (ever). I've seen lenders still allow it, but it's a case-by-case scenario.
Preferrably clean credit for the past 2 years. Specifically the last 12 months
31/43% Debt-ratios (meaning gross income cannot exceed 31% of the mortgage payment and 43% of all debt payments)
Full employment for last 2 years (work related school can count as work history with degree and transcripts)
3.5% down for traditional FHA. Down payment can be borrowed, gifted from family or funded by a HUD approved Down Payment Assistance.
$100 down for HUD owned Foreclosures
Manufactured/Mobile (Must be post July 1st 1976 mobile and pass HUD approved foundation inspection. Must be attached to land and only one title for both home and land)
FHA approved condos (after Dec. 7th 2009, no more spot checks allowed)
2-4 unit multi-family
UNIQUE GUIDELINES TO WATCH FOR
Credit for married couples must both be pulled. If only one borrower has qualifying credit, you can still get a FHA loan but the income for the non-qualifying spouse cannot be used. Income for the credit qualifying borrower must be enough to cover both spouses expenses and new mortgage payment alone unless there's a non-occupying co-borrower (see below for details)
Non-occupying co-borrowers ARE allowed, meaning a family member can co-sign for a buyer without committing to living in the home. Their income can be used to help qualify for the home purchase.
HUD has a non-flipping rule which says you cannot use FHA financing to purchase a house that has been titled in the seller's name for less than 90 days.
FHA ARM'S (Adjustable Rate Mortgages) still qualify the borrowers on the start rate only.
Here are some references for FHA loans:
FHA CONDO REFERENCES:
blog post on spot check removal
link to find approved projects
FHA MULTI-FAMILY REFERENCE
FHA HUD HOME FORECLOSURE REFERENCE
Blog post on buying a HUD Foreclosure
HUD's website to find HUD foreclosures
The web reference below is for HUD's main website. Please keep in mind that HUD will continue to change guidelines since FHA financing is becoming a prominent source of loan fundings for homeowners. Talk to a trusted lender for any updates on guidelines.