FHA Financing

At First American Mortgage, we are dedicated to matching you with the best loan product for your needs. FHA loans are helping many people realize their dreams of becoming homeowners. An FHA loan is a mortgage insured by the Federal Housing Administration (FHA). Certain criteria apply to qualify for an FHA loan. Your First American Mortgage loan officer can help you determine if an FHA loan is right for you.


FHA loans are popular among first-time homebuyers or those who cannot afford large down payments.


Who qualifies for an FHA loan?

Homebuyers must be able to make a minimum down payment of 3.5%. The down payment can be from the buyer's own funds, an approved gift source, or a grant program. In addition, the borrower(s) must have a minimum FICO score of 620 to qualify. Borrowers are required to finance an upfront mortgage insurance premium (UFMIP) of 1.75% of the total loan amount and also pay monthly mortgage insurance (MMI) at a maximum of 0.85% of the loan amount annually.


FHA loan requirements as set by the Federal Housing Authority:

  • Steady employment history or worked for the same employer for the past two years.

  • Valid Social Security number, lawful residency in the U.S. and be of legal age to sign a mortgage.

  • Down payment required and minimum credit score of 620

  • FHA loans are only available for primary residence occupancy.

  • Borrowers must have a property appraisal from a FHA-approved appraiser.

  • Front End Ratio: Borrowers are required to have a front-end ratio of less than 31 percent of their gross income. The lender must then include any compensating factors used for loan approval.

  • Back End Ratio: Borrowers are required to have a back-end ratio of less than 43 percent of their gross income. Sometimes, you may be approved with as high a percentage as 50 percent but your lender will be required to provide justification as to why they believe the mortgage presents an acceptable risk. The lender must include any compensating factors used for loan approval.

  • Typically, borrowers must be two years out of bankruptcy and have re-established good credit. Exceptions may apply.

  • Previous foreclosure: Must be 3 years from the date of Sheriff’s Sale


Contact your loan officer to see which loan product best fits your individual needs!