FHA guidelines have many rules and qualifications that must all be met if you plan to finance your home with an FHA insured loan. There are also loan limits and debt to income limits. One of the questions borrowers sometimes ask is whether FHA loans have income limits, and we'll answer that below.
Do FHA loans have income limits? There are no maximum or minimum FHA income limits required to qualify for an FHA loan. Your fully documented income must simply be enough to qualify for the loan without exceeding a 43% debt-to-income ratio.
Income documentation required to qualify for an FHA loan
FHA loan guidelines are clear that income must be fully documented for all loan applicants as follows:
- Wage earners – you must provide recent pay stubs and the last two years of your W2s and tax returns.
- Self-employed borrowers – you must provide the last two years of tax returns and possibly a P & L return for the current year.
If you receive 1099 income, we recommend you read our article on qualifying for a 1099 income FHA loan. Then, if you work a part-time job, you can read our article on qualifying for an FHA loan with part-time income.
Requirements for an FHA loan
- Minimum FICO score requirement of 500
- Minimum down payment requirement of 10 percent with a FICO score below 580
- Minimum down payment requirement of 3.5% with a FICO score above 580
- A mortgage insurance premium (MIP) is required for each FHA loan
- Maximum debt-to-income ratio of over 50%
- The house must be your primary residence
- Borrower must have a 2-year work history with steady income
If you're not sure if you can meet the minimum income requirements To qualify for an FHA loan, click to contact one of our FHA lenders and they can easily tell you how much you can spend on your new home.
Related Questions
What if my income recently went up?
If you recently had a nice raise or got a new job that pays a lot more, the lender will need documentation of that increase and some assurance that the new income level can be maintained. This could be a letter from your employer or a copy of an employment contract.
What if I am self-employed and cannot document my income through tax returns?
If you are self-employed and have very low net income or a loss, you will have difficulty qualifying for an FHA loan. Your best bet at this point would be to request a statement loan.
What if I don't have a stable income for two years?
If you have gaps in employment or income, you will need to provide an explanation and possibly a letter stating the reasons for the gap. If you were in the military or in school, you would need to provide documentation from the military of your service and/or college transcripts proving that you were in school.
If you have any other questions, contact us and we will give you everything you need to know about FHA loans and whether you can qualify with the income you have today.