FHA Loan Requirements GA (Georgia)

You’re ready to purchase a home. Great! But if you’re a first-time home buyer, it can be intimidating, especially if you haven’t banked some bucks for a big down payment. Luckily, Federal Housing Administration (FHA) home loans are ideal for first-time buyers with limited budgets and down payment resources. Learn more about FHA loan benefits. You just need to be aware of FHA loan requirements for GA (Georgia) to get going in the right direction.

Pre-qualifying for Georgia FHA loans is pretty easy since the federal government insures the loans, allowing creditors and financial institutions to lend risk-free to qualified borrowers. And, unlike conventional home loan programs, the FHA doesn’t require any cash reserves. However, there are some things to consider, such as mandatory mortgage insurance, before you sign on the dotted line.

Here’s what you need to know about FHA loan requirements for GA:

Credit score requirements

Long before you consider purchasing a home, you should start building good credit. But even if you haven’t, you may still qualify for an FHA loan. As of 2022, you can borrow up to 96.5 percent of your home’s value with a FICO score of at least 580.

Down payment expectations

Because the FHA insures all loans, you can enjoy a modest down payment compared to other home loans, provided you have a solid credit score. However, if your score lands between 500 and 579, your lender may require a 10% down payment. 

Debt-to-income ratio standards

Though the requirements of mortgage lenders vary, borrowers typically need to show a debt-to-income ratio of less than 43%. This information isn’t only for your lending institution, however. Setting yourself up for success means carefully calculating your expenses versus your income to ensure you can afford your mortgage payment for the long term.

Steady employment and income

To accompany a solid debt-to-income ratio, you should have two years of continuous employment with no unexplained gaps in job history.

College graduates actively working full-time in their field may have the option to qualify before the two-year milestone. Your loan officer will confirm if this option applies in your situation.

Required mortgage insurance premium

A mortgage insurance premium, or MIP, is an additional payment required to secure your loan. Your upfront payment will be equal to 1.75% of your loan’s total value. This payment is financed as a part of your FHA loan. As a result, you don’t need to worry about paying for this premium as a separate fee.

Georgia FHA loan caps

FHA mortgage lending limits vary based on the type of home you buy and the cost of local housing. In general, loan caps in Georgia are $420,680 for a single, one-unit property. The cap increases to over $450,000 around Atlanta and Athens and tops out at $515,200 in Greene County.

Additionally, the FHA provides 15- to 30-year loans with fixed interest rates, as well as adjustable rate options. FHA loans also allow the seller to pay closing costs up to 6%.

Most homes and condos, including short sales and foreclosures, in good, move-in condition are eligible for FHA financing. So if you’re ready to achieve your dream of homeownership, reach out to OVM Financial’s experts, who can guide you in the right direction. Give us a call or start your application online. You can also check out our other articles about FHA loan requirements in NC and FHA loan requirements in TN.