Qualifying For a Loan: Dispelling the Myths

FHA loans were created to make homeownership easier and more affordable for the average working person. Today, one in five mortgages is FHA-insured.

With an FHA mortgage, you can finance up to 96.5% of the purchase price. We also offer Conventional loans with a 3% down payment for first-time homebuyers.

FHA also allows for easier qualification requirements compared to many conventional loans, such as allowing higher debt-to-income ratios and being much more lenient towards past credit issues.

For an FHA-insured loan, you only need a 580+ credit score for a 3.5% minimum down payment (500-579 requires 10% down).

Most large banks place additional requirements on top of FHA's minimums. AAA Capital Funding adheres to FHA and Conventional guidelines exactly as they are intended, with no additional restrictions. If FHA allows it, we do too.

If you have a short or little-to-no credit history, we can often qualify you using non-traditional credit, such as payment history for utility bills, car insurance, or cell phone bills, through manual underwriting.

The fact is, you must demonstrate a two-year history of stable and recurring income (or school) to show you can maintain monthly mortgage payments. You can be on your current job for one week as long as we can document the full two years of previous employment or schooling.

Self-Employed Borrowers: You do need to document at least two years of being self-employed by showing Federal tax returns to verify income.

Other Income: Part-time work, overtime, bonuses, seasonal work, and commissions are all acceptable but are typically averaged over two years to determine a stable qualifying income.

FHA insured mortgage loans are available to people from all walks of life. The limits for FHA financing are set by the Metropolitan Statistical Area and County, based on median house prices—not on the borrower's income.

AAA Capital Funding does not impose specific income or credit restrictions over and above what FHA, Fannie Mae, and Freddie Mac allow. Our mission is to make quality, affordable homeownership accessible to all.

Your student loan debt is considered as part of your overall financial picture, specifically in your debt-to-income ratio. We may need additional information if your loans are currently deferred, but by itself, student loan debt does not disqualify you from obtaining the home of your dreams.