Thousands of people need to borrow money at some point in their life. Whether you need to get some money from a financial institution to cover a new business venture or repay an old debt, borrowing money is crucial to staying on your feet and figuring out the next steps in life.

FHA Loan Requirements in 2021

A FHA loan is a mortgage insured by the Federal Housing Administration and issued by a lender. The FHA, also known as the Federal Housing Administration, helps low or moderate-income home buyers purchase a home without going into extreme debt. This loan helps those with lower incomes purchase a home by paying a lower down payment and requiring a lower credit score.

To qualify for an FHA loan, there are certain requirements you must meet to be approved. Although the full list of the FHA loan requirements is extensive, there are basic necessities and characteristics you must have to obtain the loan.

  • A credit score of 500 or higher
  • A debt-to-income ratio of less than 50%
    • Lenders take note of your debt-to-income ratio, known as DTI. This statistic measures the percentage of your income that you spend on monthly debt. Monthly debt can be anything from credit card payments to student loans, affecting how lenders analyze your finances and value your credit score.
  • 3.5% down payment if your credit score is above 580
    • The minimum downpayment for an FHA loan depends on your credit score.
  • 10% down payment if your credit score is between 500 and 579
  • The house must be your primary residence
  • The house must meet the FHA’s minimum property requirements
    • The property requirements for an FHA loan are the property can’t be for investment, must contain an FHA appraisal, can’t be a house flip, and you must take the title to the property in your own name.

Who are FHA loans for?

FHA loans are not just for first-time home buyers, but also lucrative for those who have lower credit scores, those with smaller down payments, or anyone looking to purchase a home or refinance a mortgage.

FHA Loan Limits

The FHA loan limits vary by county, with the average limit being $356,232 for a single-family home in 2021. However, the limits for FHA loan qualifications can vary greatly depending on your geographical location and your area’s median income. If you live in a wealthy area, the FHA loan will be much higher than in a low-income location. Checking the FHA loan limits of your local area can help provide you with an idea if you will meet the FHA loan qualifications when applying for financial help.


As you can see, an FHA loan is an important part of the home buying process for those who have lower income levels and lower credit scores. By taking note of the FHA loan qualifications, people of all income levels can take the next steps towards buying the home of their dreams without worrying about going into crippling debt in the process.

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