How to Apply For an FHA Mortgage Loan

Federal Housing Administration mortgage loans or FHA loans for short are government-backed loans which are typically easier to get approval and require lower down payments.

With an FHA loan, your down payment can be as low as 3.5%. Aside from the low down payment, FHA loans don’t require a high credit score. In fact, your credit score can be as low as 550to get approval for an FHA loan. Even though these aren’t so strict, there are a few things you should know before applying for an FHA loan though.

Income and Existing Debt

For the most part, your existing debt and income will affect your chances of getting approved for FHA loans. As of 2024, your mortgage payment and other monthly debt payments such as credit cards or other loan payments cannot be more than 48% of your income. This is included with the FHA loan.

Therefore, if the FHA loan you’re applying for takes 20% of your income and other debt 35%, you won’t get the mortgage loan. So you need to factor in the FHA loan into it when calculating your chances as well. There is going to be a big correlation between your income and existing debt when applying for an FHA loan regardless of the lender.

As for income limits when applying for Federal Housing Administration mortgage loans, there isn’t a limit. Your income can be $12,000 to $12 million. The agency and the lenders do not have a limit on income.

Applying for FHA Loans

There is no difference between traditional mortgage loans and FHA loans with applying. You simply apply the same way as you would with a non-FHA loan.

Best FHA Mortgage Loan Lenders

Most major mortgage loan lenders offer FHA loans. You can check their own requirements as far as the credit score is concerned before making an application. Getting denied will hurt your credit score. So make your research on the lender before making any application.

How to Apply For an FHA Mortgage Loan

This is for all types of loan and credit card applications, not only for the FHA loans. For more tips on how to build or rebuild a good credit score, read our credit score articles.

Chances of Approval

Lenders are typically more generous with FHA loans because they are backed by the FHA. If the borrower fails to make payments, the FHA will compensate the lender. For this reason, lenders have less strict income requirements for approvals.

With that being said, if you have a stable income, good enough credit score, and qualifying income-to-debt ratio, you are likely to get the loan. If you’re eligible, we highly recommend FHA loans as you’ll make a significantly less down payment. You can then put the rest of your money for rainy days or to pay ahead.

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