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FHA Bad Credit Home Loans                                                                                                                        

FHA bad credit home loans programs reflect the Government's commitment to expanding homeownership and home buying opportunities through reduced down payment requirements and relaxed underwriting compared to conventional loans. If you have bad credit, FHA loans may be your best option. Email FHA bad credit home loans questions. FHA bad credit home loans are flexibl.

FHA bad credit home loans recognize high cost areas and have increased the maximum FHA loans amounts. The FHA loans limits are:

Find the FHA l<span class="style1">oan limit in your county.

FHA bad credit home loans are an outstanding choice for first time homebuyers because theyrequire only 3% cash and are significantly more forgiving of past bad credit, frequently accepting bad credit. They look at the last two years of your credit history. If there is some bad credit, we can overcome it with explanations and supporting documents. Never rule yourself out for FHA home loans because of bad credit, prequalify and have me review your credit. I have more information on FHA home loans credit requirements available

This page is focused on using FHA home loans to purchase a home. If your are refinancing existing FHA loans see my refinance center.

There are some credit issues that we must allow for a time to pass before you can qualify for FHA home loans. They are:

  • Two years from the date of discharge for a bankruptcy
  • Three years from the date of foreclosure

FHA requires any outstanding collection accounts, judgments, charge off's be paid before closing. If you have had credit difficulties in the past, FHA compensating factors can get your loan approved.


  • Lower required down payment
  • FHA loans are assumable with a qualified borrower
  • Higher qualifying ratios of 29% for housing and 41% for total debt on existing construction; 31% for housing and 43% for total debt on new construction
  • Flexible underwriting standards
  • Gift funds for down payment and closing costs are allowed
  • Up-front Mortgage Insurance Premium can be financed
  • The lowest down payment (as low as 3%, never more than 5%) requirement of any non-subsidized financing program
  • Non-occupant co-borrowers are allowed
  • Seller allowed to pay prepaid expenses
  • Seller can contribute up to 6% of purchase price toward closing cost and discount points
  • With FHA’s no cost streamlined refinancing you can lower your payment at NO COST to you. Usually, closings can occur within 2-3 weeks.
  • The FHA ARM has the best features on the market with a 1% annual interest rate cap and a 5% lifetime cap.


If you currently have an FHA loan and are considering refinancing to lower your payments there is a low cost " FHA streamline" refinance process. One of the features of the FHA program is that the loan is assumable should you sell in the future. If interest rates rise, an assumable mortgage may be the difference between being able to sell your home or not.


They offer an adjustable rate mortgage which allows you to buy a home with very low payments and down payment requirements. Useful if you have a debt to income issue or want to buy more home.

For more information go to the FHA Streamline Refinance page. I also have a Free report "Buying your First Home" available by email.

Read about FHA bad credit home loans Closing Costs

I have included a page on how to calculate your qualification ratios.

I have included a page on documentation requirements.

Learn more about improving your credit scores

I have an article "Buying your home in 2008" by email explaining negotiating strategy in today's market.

If you have had credit issues in the past, it is absolutely critical in today's market that they be addressed before you try to get a mortgage. I have referred my clients to CreditFX for the past 5 years. Exceptional customer service and I am often stunned at what they have been able to have removed from people's reports, allowing my clients to qualify. Their charge of $199 is one of life's true bargains.

As a Certified Mortgage Planning Specialist, I offer an analysis of your situation today can make suggestions on how small changes in how your debt is structured today can have a life changing effect in the years to come.  Read more about this free, no obligation service.

FHA bad credit home loansPrequalify for your FHA bad credit home loans. 

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