FHA loan income requirements

FHA Loan Requirements for 2023

posted in: Mortgages

Back in 1934, only about 10% of American households owned the homes they lived in. It was difficult for people to get approved for mortgages, so the vast majority of American households rented their homes.

This led to Congress creating the Federal Housing Administration, which is now better known as the FHA. The FHA falls under the U.S. Department of Housing and Urban Development umbrella. It’s responsible for providing mortgage insurance on any mortgages that FHA-approved lenders give out.

Would you like to take out an FHA to buy a home? The FHA loan income requirements and other FHA guidelines must be met for you to get approved for this type of mortgage loan.

Today, we’re going to lay out some of the different FHA loan requirements for 2023 so that you can see if you meet them. Learn about them below.

Credit Score

First things first: If you’re going to apply for an FHA loan, you’re going to have to make sure your credit score is high enough. One of the first things a lender will look at is your credit score to be sure you qualify for an FHA loan.

Your credit score must be above 500 to get approved for an FHA loan. But ideally, you’ll want your credit score to be at least 580 since that will give you access to a lower down payment option.

You should check your credit score to know whether or not you’ll be eligible for an FHA loan. If it needs work, consider options to improve your score, including paying down debt and regular on-time payments.

Down Payment

You’ll need to make a down payment when buying a home with an FHA loan. But that down payment is going to depend on what your credit score is.

If your credit score is currently 580 or higher, you will be able to make a down payment of just 3.5% on a home when using an FHA loan to buy it. That will be a relatively small price to pay for a down payment when you consider that a conventional mortgage calls for you to make a 20% down payment.

However, it’s worth noting that your down payment will jump all the way up to 10% if your credit score is above 500 but below 580. That might give you all the incentive you need to bring your credit score above 580 before applying for an FHA loan.

Debt-to-Income Ratio

Less than 25% of American households have zero debt. If you happen to live in one of these households right now, you won’t have to worry about your debt-to-income ratio.

But most households have at least a little bit of debt. If you live in one of them, you’ll need to see your debt-to-income ratio before applying for an FHA loan.

To get approval for an FHA loan, your debt-to-income ratio will need to be under 43%. If this ratio is higher than 43%, you’re going to need to work on paying down some debt so that you can qualify for an FHA loan.

Mortgage Insurance

More often than not, you’re going to need to obtain a mortgage insurance policy when buying a home with a down payment under 20%. Since you’ll be putting down less than 20% on a home purchased with an FHA loan, you will fall into this category.

You should shop for mortgage insurance for a home before buying it to be sure it’ll fit into your budget. If you suspect you won’t be able to carry this type of insurance on a home, an FHA loan isn’t going to work for you.

Primary Residence

Are you planning on purchasing a home with an FHA loan and then renting it out to someone else so you can profit from it? Unfortunately, this will not be permitted.

If you use an FHA loan to buy a home, that home is going to need to serve as your primary residence. If this isn’t going to be the case, you will have to search for a different type of mortgage loan.


Pretty early in the process of applying for an FHA loan, you will be asked about your employment status. You’ll also need to provide information about your current employer so that a lender can ensure you’re employed before extending a loan to you.

If you aren’t employed right now, you will need to obtain a job to get approved for an FHA loan. You’ll also need to establish some employment history so that a lender takes your loan application more seriously.

Are There FHA Loan Income Requirements?

At this point, you might be wondering whether there are going to be any FHA loan income requirements. We haven’t said anything about income just yet.

You’ll be happy to hear that there aren’t any minimum or maximum FHA loan income requirements. You can make as much or as little as you want and still apply for an FHA loan.

But you will need to be employed and have a steady income coming in to get an FHA loan. You will also need to have a high enough income to pay the mortgage on a home while also taking care of any debts you might have.

Additionally, you will need to be prepared to account for any cash gifts you might receive that you’re going to use to make a down payment on a home. You should speak with a loan officer about how to do this in the proper way.

Contact Us for More Information on Securing FHA Loans

Are you interested in applying for an FHA loan and using it to buy a home? 7th Level Mortgage, LLC can provide you with more information on FHA loan income requirements and other FHA guidelines.

We can also provide mortgage loans to those looking to buy a home in Delaware, Colorado, Georgia, Florida, Maryland, Minnesota, New Jersey, New York, Ohio, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, and Virginia. Reach out to us now to get a quote.

7th Level Mortgage is a leading one-stop mortgage company providing deeply informed, custom-tailored assistance with each mortgage transaction phase. If you are searching for a home loan in New Jersey, Pennsylvania, Delaware, Maryland, New York, or Florida, please contact us today so that we can determine the best Mortgage Lender to place your loan with and get you the best possible rate and program.