Today the most popular financing option for home buyers is FHA loan program. However, FHA loans in 2015 with its few changes in rules and regulation in last few years, it is becoming more difficult for first time home buyers to qualify for the FHA loan. At present, the government is also demanding more mortgage premiums. Here are the details related to the current requirements and rules for 2015 Loans.

What to know about FHA loan?

FHA mortgage loans are covered by the Federal Government. This loan program is managed by HUD, Department of Housing and Urban Development and Federal Housing Administration. The FHA or Federal Housing Administration assures lenders against any financial damage caused by borrower. This is the major difference between regular home loans and FHA.

One more difference is down payments as borrowers of FHA program can get the down payment to as little as 3.5 percent, while purchasing the house.

Today, a number of banks and lenders offering home loans also provide FHA. These loan programs are popular mainly due to the smaller down payments and credit requirements.

Earlier it was believed that FHA loans are very easy to get in comparison to regular loans. This is true to some extent. With the government support, lenders provide some relief when it comes to credentials and qualifications of the borrowers.

In terms of 2015 FHA loan requirement, getting the loan is a bit more difficult because of following reasons.

FHA Requirements in 2015

At present the rules and regulations of FHA are same as they were a few months ago. The current rules and regulations are as following.

• In order to qualify for the down payment of 3.5 percent, borrowers need to have minimum credit score of 580.
• The total debt of a borrower needs to be not more than 43 percent of his monthly pay.
• Department of Housing and Urban Development allows loan applicant to get more debt to income proportion if a lender has some important compensating factors such as great credit score, important cash reserves and on time mortgage payments. Readers can get full information in HUD Handbook 4155.1, Chapter 4, Section F.
• Borrowers, who have a credit score less than 620 and their DTI or debt-to-income ratio is 43 percent, can face more inquiries while applying for the loan. In this case borrowers can be asked to go through manual underwriting describing the compensating factors to frame the low-score or high-debt condition.
• Those who have a credit score ranging from 500 to 579 needs to set aside at least a 10 percent down payment in case their application is approved.
• Lenders can apply their individual guiding principle on top of strategies applied by HUD. This process is recognized as overlay. As a result, the loan application of a borrower can be rejected even f the credit score is according to the plan of HUD’s least cutoff.

Those interested in the changes for FHA Loans in 2015 can get more information by visiting HUD.gov. In addition, there may be some exceptions to regulations explained above. The simple rule to keep in mind at this point is – do not guess that you are unqualified by just going through the above details. The best method to reach to a conclusion is to apply for the FHA loan.