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Common FHA Loan Questions in 2021

While FHA Loans are some of the easiest types of mortgage loans to qualify, it’s not always cut and dry. Here are some questions we’ve answered for other borrowers on FHA mortgages.

What documents are needed for an FHA loan?

In addition to documents that verify your income and assets, you would need a two-year employment history as well as proof of down payment.

Any issues qualifying for an FHA loan with a new job?

As long as you’ve got a signed offer letter stating a employment start date, you can use the new job’s salary for qualifying for a mortgage. It’s called expected income under FHA guidelines.

What is the FHA loan “Self Sufficiency Test” for 3-4 unit properties?

75% of the total market rent (aka pro forma) for all the units has to be more than the total monthly mortgage payment. That total payment includes: principal, interest, taxes, mortgage insurance (PMI) and any other insurance  (like homeowners insurance).

If only my wife is on our primary residence’s FHA mortgage, can I get an FHA loan to purchase a home for our in-laws?

For buying a home for your in-laws, you wouldn’t qualify as an owner-occupant for this FHA loan, but you could still be a non-occupying co-signer for your parents/in-laws IF they were also to be on the loan.

What is a FHA Streamline loan?

FHA streamline is a type of refinance where both income documentation and an appraisal are NOT required

Does switching jobs and companies count against the 2 years of steady employment required for an FHA loan?

FHA requires a two-year employment history, but it does not need to be in the same position or with the same employer. They’re going to look at the cumulative job history and the will qualify you at that new salary amount.

Can I buy a home with an FHA mortgage and rent out the spare rooms?

As long as you plan to occupy the home yourself, you’re free to rent out any extra bedrooms, the couch, whatever you want.

What are FHA minimum property standards for qualifying for an FHA loan?

The FHA imposes minimum property standards to protect lenders by ensuring the home is safe for future occupants, secure, and structurally sound – aka, the foundation isn’t going to crumble, the doors are screwed on right, and there aren’t secret entrances you don’t know about. The FHA standards do allow for minor cosmetic flaws or those that result from normal wear and tear. The standards are meant to prohibit seriously hazardous conditions – like the presence of toxic chemicals, flooding, or erosion. And anything that is installed on the property has to meet basic durability requirements and guard against adverse weather conditions, corrosion, and fire.
To qualify for an FHA loan you have to have the property appraised by a HUD approved appraiser. This process can take anywhere from a few days to a few weeks, depending on the appraiser’s schedule and workload, but the actual appraisal should only take a few hours. A standard appraisal looks like this:
1. The appraiser determines the market value of the property by finalizing the Uniform Residential Appraisal Report.
2. The appraiser must verify that the property meets, or exceeds, the minimum property standards. If they discover the property has deficiencies, the loan will be ineligible for funding until those defects are fixed.
3. The final appraisal is delivered to the lender.

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The Turnkey Foundation, Inc. d/b/a Arbor Financial Group is an Equal Housing Lender. In all jurisdictions, the principal {NMLS: 236669} licensed location is 2932 Daimler Street, Santa Ana, CA, 92705. {Julie Aragon MLO #250691}