Home Loan Qualifications

By: EconomyWatch Content   Date: 14 December 2009

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There are a number of housing programs available to US citizens. These programs have been developed by the US department of Housing and Urban Development (HUD). The HUD administers these programs to assist US citizens to purchase affordable homes. The organization tries to achieve this mandate by:

 

  • Selling homes owned by the HUD through its programs or at discounted prices.
  • Enabling homebuyers, who usually do not qualify for traditional bank loans, take loans easily.

Home Loan Qualifications: For HUD Homes

To qualify for HUD programs is a very simple process.

 

Here are some general qualifications that a home buyer is required to fulfill, such as:

  • Regular source of income through job or retirement.
  • Sound credit payment history
  • Low outstanding long-term debts, such as automobile loans.
  • Proof of income or job history for at least previous two years.
  • Sufficient cash to make a down payment. (The limit of amount is decided on the basis of the price of the home.)
  • Ability to make a monthly mortgage payment including the costs of home ownership.

Home Loan Qualifications: HUD Programs

There are a number of programs sponsored by HUD for new homebuyers, such as:

  • Hurricane Evacuees Discounted Sales
  • Indian Home Loan Guarantee Program
  • The Good Neighbor Next Door (for firefighter, police officers and teacher)
  • Home Ownership for Public Housing Residents

Home Loan Qualifications: FHA

The Federal Housing Administration operates under the HUD to help home buyers get loans by providing private lenders insurance on the HUD qualified borrowers.

 

The qualification process is relatively simple and requirements are extremely flexible. The FHA outlines 36% as minimal down payment of the price of the home. The rate of down payment on home loan in banks was 10% in 2009.

 

To secure an FHA loan one does not need high credit score as long as:

  • No outstanding judgments and liens are indicated.
  • A period of two years has passed since a discharged bankruptcy.
  • A period of three years has passed since a foreclosure.

 

Remember, one can qualify for an FHA loan irrespective of low income and poor credit scores.


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