FHA loan residency requirements

The FHA loan is one of the easiest ways to finance a new home. The FHA loan program was created under Franklin Roosevelt’s New Deal program to help the housing industry and make it possible for home bCheck listuyers of modest means to purchase homes. The following information is provided to illustrate the minimal qualifications for an FHA loan. If you meet the following guidelines, you may qualify for an FHA mortgage loan.


The FHA loan program does not have a minimum age requirement; however, the borrower must be old enough to meet the age requirement that a mortgage note can be legally enforced in the state, or other jurisdiction, where the home is located. There is no maximum age requirement.


All applicants are required to have a valid social security number.


In addition to US citizens, lawful permanent resident aliens, and non-permanent resident aliens are eligible for an FHA loan. Permanent resident aliens are required to provide evidence of their permanent residency, and state their residency status on the mortgage application. Non-permanent resident aliens must state that the home will be the principal residence, have a valid social security number, and are eligible to work in the United States, confirmed by the Employment Authorization Document (EAD) issued by the USCIS. Non-U.S. citizens without lawful residency in the U.S. are not eligible for FHA mortgages.


The FHA guidelines permits a credit score as low as 500 for home buyers. However, credit scores between 500 and 579 require a down payment of at least 10%. A credit score of 580 or higher are eligible for the FHA minimum down payment of 3.5% (i.e. 3.5% X $100,000 = $3,500). Lenders are permitted by the Federal Housing Administration to exceed the minimum credit scores for loan approval.


The lender needs to verify the applicant's most recent two years of employment and income. W-2's are typically used to verify employment. The FHA requires a paystub referencing the year to date earnings; or in the alternative, the lender can contact the employer directly by phone or mail. The FHA guidelines do not specifically address whether the applicant is required to be employed for the previous two years prior to application.

Applicants may qualify if gaps in employment greater than six months or longer (an extended absence), if the applicant has been employed in the same job for a minimum of six months at the time of application; and has a two year work history prior to the absence from employment.

Most FHA lenders want an FHA mortgage payment to be no more than 29% of the applicant's monthly income. The mortgage payment consists of principal & interest, 1/12 of the annual real estate taxes & homeowner's insurance and monthly mortgage insurance premium.


The minimum down payment on an FHA loan is currently 3.5%.