Understanding HUD Guidelines for FHA Loans

The U.S. Department of Housing and Urban Development, or HUD, has specific FHA guidelines on loans it offers to homebuyers and homeowners. For people who are considering of applying for FHA loans, they must stringently follow the department's standards to prevent a denial of their applications.

HUD Guidelines for FHA Loans

Before you submit your loan applications, refer this list of basic guidelines for FHA loans. Some of the federal government policies for mortgage, refinancing and rehabilitation loans are:

  • Borrowers can only choose lenders that are approved or accredited by the HUD for FHA loans. Therefore, you cannot select a lender not found on their list. The official list of lending companies can be searched using the HUD-FHA website.

  • Borrowers must demonstrate a good credit rating for the past two years and must meet other standard credit qualifications. You must prove that you have the capability to repay the loan. This will be based on your debt-to-income ration.

  • Borrowers who want to refinance, under the Home Affordable Modification Program, must not have a default mortgage loan or else the application is denied. If you have been delinquent on your loan payments, you must first settle the problem with your servicer before you can become eligible for refinance.

  • Borrowers who want to a 203(k) Rehabilitation Program must abide to the Minimum Property Standards and other HUD ordinances in line with the said financing program.