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Home » Less Than 5% Down » FHA Loans » Guidelines

FHA Loans.

Flexible Underwriting, Credit Scores Down to 580, High Debt-To-Income Ratios!

The most flexible low money down loan solution available, with no income or geographic eligibility restrictions

VA Loans Program Guidelines

Loan Purpose

  • Purchase
  • One-time Close Construction Loan
  • Refinance: rate-term and cash-out

Credit Profile

  • 550 minimum middle credit score for all borrowers on the loan – purchase
  • 620 minimum middle credit score for all borrowers on the loan – one-time close construction loan
  • No foreclosure or short sale within three years of contract ratification date
  • No Chapter 7 bankruptcy discharge within two year of contract ratification date
  • No mortgage delinquency in the last 12 months for a FHA Streamline Refinance

Loan Amount

  • Maximum loan limit is established by The Department of Housing and Urban Development and is determined by the County where the property is located and by the household units. Click here for loan limits in your area
  • Base Loan amount is determined by the purchase price of the house, less the down payment (minimum 3.50% down required). The Base Loan can’t exceed maximum HUD loan limits
  • Total Loan amount is the purchase price, less the down payment, plus the FHA 1.75% Upfront Mortgage Insurance Premium (UFMIP)

Mortgage Insurance Premiums

  • Upfront Mortgage Insurance Premium (UFMIP) 1.75% of the Base Loan Amount
  • Annual Mortgage Insurance Premium (MIP) required
  • MIP Calculations are as follows:
Mortgage Term of More Than 15 Years
Base Loan AmountLTVMIP (bps)Duration
Less than or equal to $625,500≤ 90.00%8011 years
> 90.00% but ≤ 95.00%80Mortgage term
95.00% > 95.00%85Mortgage term
Greater than $625,500≤ 90.00%10011 years
> 90.00% but ≤ 95.00%100Mortgage term
> 95.00%105Mortgage term
Mortgage Term of Less Than or Equal to 15 Years
Base Loan AmountLTVMIP (bps)Duration
Less than or equal to $625,500≤ 90.00%4511 years
> 90.00%70Mortgage term
Greater than $625,500≤ 78.00%4511 years
> 78.00% but ≤ 90.00%7011 years
> 90.00%95Mortgage term


  • As determined by Automated Underwriting System or AUS with DTI ratios up to 56%. Requires a Desktop Underwriter “Approved/Eligible” or Loan Prospector “Accept” findings
  • Manual Underwrite acceptable with DTI ratios up to 31% front end and43% back end

Property Type

  • Owner-occupied properties
  • Existing attached and detached single-family residences
  • New construction with permanent financing only
  • PUD’s (i.e. Townhomes)
  • Condo-units. HUD, FHA, FNMA or FHLMC approved project
  • Log cabin homes, provided Appraisal Report lists other comparable log cabin homes that have recently sold in the area


  • Owner occupied only
  • Non-occupant co-signers permitted

Property FHA Evaluation

  • Full FHA appraisal with interior inspection and photos


  • All loans must be fully documented per Agency Guidelines
  • For Self Employed borrowers, in addition to Agency Guidelines, two years of the tax returns (personal and business) along with a year-to-date profit and loss (unaudited)

Down Payment/Closing Costs

  • 3.50% down payment required with a minimum 580 middle credit score
  • 10% down payment required with a minimum 550 middle credit score
  • Seller contribution toward buyers closing costs and escrows up to 6% of the purchase price
  • Closing cost help can come from flexible sources including family member gifts and loans against a 401k retirement account


  • Amortization period: 15, 20, 25, 30-year fixed rate
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