Who qualifies for an FHA loan in Virginia?
A Federal Housing Administration (FHA) loan is a mortgage which is insured by the Federal Housing Administration (FHA) and issued by an FHA-approved lender. As they’re intended for low-to-moderate-income homebuyers, they typically have lower credit score and down payment requirements than conventional loans. Due to the benefits they offer, FHA loans are popular with first-time homebuyers.
While FHA loan requirements are less strict in some ways, however, they do carry other stringent requirements. For instance, in order to secure the FHA’s guarantee, it’s necessary to purchase mortgage insurance so that the loan is less risky to the lender if you happen to default on the loan.
Qualifying for an FHA loan in Virginia
The FHA loan requirements for Virginia can vary depending on the unique loan requirements of each FHA-approved lender, but typically, meeting the following qualifications should be your focus.
Credit: Most Virginia FHA lenders will require that you have a credit score of at least 580. Some FHA loans, however, are available to would-be buyers with scores as low as 500— depending on how much of a down payment they can afford.
Down payment: If your credit score is under 580, it may be required that you put down 10% in order to qualify for an FHA loan. If your credit score is above 580, you can get by with a down payment of as little as 3.5%, compared to a minimum credit score of 620 and a down payment of 3-20% for a conventional mortgage.
FHA loan limits: FHA loans have outside limits on how much you can borrow. FHA loan limits refer to the maximum loan amount available in any given county. 2021 FHA loan limits in Virginia fall between $356,362 and $822,375 for a single-family home, depending on the location of the property you’re looking to buy.
Employment: Although your eligibility for an FHA loan is not affected by how low or high your income happens to be, FHA loans require that you provide proof of 2 years of steady employment, or proof that you have worked for the same employer for a minimum of 2 years. You’ll also need to provide at least 2 years’ worth of tax returns, and most lenders will also want to see your most recent bank statements.
Property: The FHA has property requirements known as minimum property standards, which pertain to the safety, security, and soundness of your soon-to-be-home. To meet these standards, the property you wish to purchase must pass an inspection, and an appraiser must also verify the value of the property.
If approved for an FHA loan in Virginia, you’ll be given a checklist of loan conditions which will outline everything you need to provide in order for the loan to close. Commonly, these conditions include further requirements that the home you’re purchasing be your primary residence, and that you occupy the property within 60 days of closing. With proper organization, you should not have difficulty completing your FHA loan application and with any luck, you’ll soon be a proud new homeowner. Best of luck to all applicants!