An FHA loan is a mortgage loan insured by the Federal Housing Administration (FHA).
FHA loans have more lenient income and credit requirements than conventional loans. Because of this, they are the most popular mortgage loans amongst African Americans.
FHA loans require borrowers to meet certain qualifications. The following qualifications were effective for FHA loans as of January 1, 2022.
Credit Score Requirements
The following chart outlines HUD’s credit score requirement for FHA loans.
| Minimum decision score | FHA Eligibility |
| 580 or above | Eligible for maximum financing |
| 500 – 579 | limited to a maximum LTV of 90% |
| less than 500 | not eligible for FHA insured financing |
Income Requirements
To qualify for an FHA mortgage, HUD requires that your income be verifiable and stable. However, FHA does not require that borrowers hold their position for a minimum amount of time. Therefore, you could potentially qualify for an FHA mortgage, even if you have been on your job for a few months.
FHA will generally want to see at least a two-year employment history. However, FHA may make exceptions for those who have taken time out of the workforce to raise children.
Loan Limits
FHA limits the amount of money you can borrow for your home.
In 2022, FHA increases the limit for its loans.
The following chart outlines the FHA loan limits for 2022 compared to those of 2021.
| Type of Loan | 2022 FHA Limit | 2021 FHA Limit |
| National Conforming Loan | $647,200 | $548,250 |
| Loans in Low-Cost Areas | ||
| One-Unit: | $420,680 | $356,362 |
| Two-Unit: | $538,650 | $456,275 |
| Three-Unit: | $651,050 | $551,500 |
| Four-Unit: | $809,150 | $685,400 |
| Loans in High-Cost Areas | ||
| One-Unit: | $970,800 | $822,375 |
| Two-Unit: | $1,243,050 | $1,053,000 |
| Three-Unit: | $1,502,475 | $1,272,750 |
| Four-Unit: | $1,867,275 | $1,581,750 |
These limits are even higher for those who live in Alaska, Hawaii, Guam, and the Virgin Islands. Details for those limits can be found here.
Additional Requirements
Borrowers must meet the following minimum requirements to qualify for an FHA loan.
- must have a valid Social Security number
- must be of legal age (determined by property location) to enter into a mortgage note
- must not have any outstanding court-ordered judgments
- must not have a foreclosure which occurred within the past 3 years.
- must not have filed bankruptcy within the past two-years.
