The DiRoberto Team


If you’ve been considering taking the next step toward homeownership, you’ve likely heard about FHA loans. Offered by the Federal Housing Administration (hence, “FHA”), these loans are great for a number of people hoping to purchase a home but who don’t have a large down payment saved.

There are many misconceptions about FHA loans since they’re often advertised by large, private mortgage lenders but are technically a government program. In order to clear up some of the confusion, we’ve provided answers to some frequently asked questions regarding FHA loans.

Read on to learn about FHA loans and how they might help you purchase a home.

Who issues an FHA loan?

FHA loans aren’t issued by the government. Rather, they’re issued by private lenders but insured, or “guaranteed,” by the government.

Since lenders want to make sure they’ll see a positive return from lending to you, they typically want you to have a high credit score and a large down payment (typically 20%). However, not everyone is able to meet those requirements. In this situation, the FHA is able to help you acquire a loan by giving your lender a guarantee.

Are there different types of FHA loans?

Yes. In fact, there are nine distinct types of loans guaranteed by the FHA. These include fixed rate mortgages, adjustable rate mortgages, refinance loans, reverse mortgages, VA loans, and more.

What do you need to qualify for an FHA loan?

It’s a common misconception that you need to be a first-time buyer to qualify for an FHA loan. However, if you have previously owned a home that was foreclosed on or if you’ve filed for bankruptcy, the foreclosure and bankruptcy have to be at least three years old.

You’ll also need to demonstrate a stable employment history, usually including two years of employment with the same employer.

Finally, the FHA will ask you for your current and previous addresses, the last two years tax returns, and the W-2 forms from any of your recent jobs.

What is the most I can borrow with an FHA loan?

The FHA sets mortgage limits on loans depending on the state and county you’ll be living in. For a single-family home, the limit ranges from $275,000 to $451,000. So be sure to check the limits for your state and county.

Can you refinance an FHA loan?

Refinancing a loan is a great way to receive a lower interest rate or to shorten the term of their mortgage to save in the total number of interest payments. In fact, the FHA typically only allows refinancing when it will result in lower interest payments on a loan.

What is the minimum credit score needed to qualify for an FHA loan?

While you don’t need excellent credit to qualify for a loan, the FHA will require you to have a score of at least a 580. You can check your score for free online from a number of companies, such as Mint or Credit Karma. Be aware, however, that scores vary between credit bureaus. So, it’s a good idea to check your FICO score once per year, which is the score used by mortgage lenders.


Buying your first home is a big endeavor, both financially and personally. Homeownership means taking on new responsibilities and bills, but it also means true financial independence.

If you’re hoping to buy a home in the near future, you might be wondering what you should be doing now to put yourself in the best position when it comes time to buy a home. Well, you’re in luck. Today’s post is a simplified list of all of the things you can be doing today to start making your way toward your ultimate goal of homeownership.

1. Pay off small debts

The first thing you’ll want to do to start saving for a down payment is to make sure you’re not pouring money down the drain to credit card companies for interest rates. If you owe small amounts of money (or less than $1,000), now is the time to aggressively pay down those debts.

The goal here is to get your credit cards to a place where you pay off your balance in full each month, avoiding interest while still earning rewards and building credit.

2. Speaking of credit…

One of the most important aspects of buying a home is your credit score. Take the time to learn about the 5 main things that contribute to your credit score and then work on ways to improve your score in those areas.

3. Don’t open any new accounts if you can help it

Once you start getting closer to applying for a mortgage, you won’t want any new inquiries on your account that are temporarily lowering your score. If you need to open a new account to lift your score, then do so well in advance of applying for a mortgage.

4. Get serious about saving for a down payment

There are a few ways to proactively save for your down payment; none of them include setting money aside when you feel like it. Start by opening a dedicated account and direct-depositing a portion of your pay into that account each week.

If you have an emergency fund in place, you might be in a position to use a CD or certificate of deposit. These give the highest earnings from interest out of any form of savings. The catch? You can’t withdraw from the account until you reach your savings goal without a penalty. If you know you won’t need to dip into these funds before they’ve matured, a CD is an excellent way to save.

5. Find out how much house you can afford

Homes are expensive. but, if it’s your first home, you might need to borrow the maximum amount form the bank to find a house that you’ll love. To find out what is a reasonable amount to spend on a home, you’ll need to consider your monthly mortgage, bills, taxes, insurance, and any other expenses. Leave yourself room for savings, emergencies, and to live a little. You won’t be able to enjoy your home much if you have to spend your days struggling to afford it.

6. Career planning is vital

A good career is a balance between stability and upward mobility. Don’t be afraid to be on the lookout for new positions with higher pay and better opportunities, even if you’re happy with your current job.

If you’ve been in your position for a while, consider asking for a raise. Research salaries for other people in your position and go to your boss equipped with data to show that show you deserve a raise.




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