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The Best Loan When You Have Few Other Choices

What Documents are Needed to Apply for a FHA Loan?

Your loan approval depends 100% on the documentation that you provide at the time of application. You will need to give accurate information on:


• Complete Income Tax Returns for past 2-years

• W-2 & 1099 Statements for past 2-years

• Pay-Check Stubs for past 2-months

• Self-Employed Income Tax Returns and YTD Profit & Loss Statements for past 3-years for self-employed borrowers Savings

• Complete bank statements for all accounts for past 3-months

• Recent account statements for retirement, 401k, Mutual Funds, Money Market, Stocks, etc. Credit

• Recent bills & statements indicating account numbers and minimum payments • Landlord's name, address, telephone number, or 12- months cancelled rent checks

• Recent utility bills to supplement thin credit • Bankruptcy & Discharge Papers if applicable

• 12-months cancelled checks written by someone you co-signed for to get a mortgage, car, or credit card, this indicates that you are not the one making the payments



• Drivers License

• Social Security Card

• Any Divorce, Palimony or Alimony or Child Support papers

• Green Card or Work Permit if applicable

• Any homeownership papers Refinancing or Own Rental Property

• Note & Deed from any Current Loan • Property Tax Bill

• Hazard Homeowners Insurance Policy

• A Payment Coupon for Current Mortgage

• Rental Agreements for a Multi-Unit Property

How big of a FHA Loan Can I afford?

Your monthly costs should not exceed 29% of your gross monthly income for a FHA Loan. Total housing costs often lumped together are referred to as PITI. P = Principal I = Interest T = Taxes I = Insurance

Examples: Monthly Income x .29 = Maximum PITI $3,000 x .29 = $870

Maximum PITI

Your total monthly costs, or debt to income (DTI) adding PITI and long-term debt like car loans or credit cards, should not exceed 41% of your gross monthly income.

Monthly Income x .41 = Maximum Total Monthly Costs $3,000 x .41 = $1230 $1,230 total - $870 PITI = $360

If I've Had a Bankruptcy in Recent Years, Can I Get a FHA Loan?

Yes, generally a bankruptcy won’t preclude a borrower from obtaining a FHA Loan. Ideally, a borrower should have re-established their credit with a minimum of two credit accounts such as a car loan, or credit card. Then wait two years since the discharge of a Chapter 7 bankruptcy, or have a minimum of one year of repayment for a Chapter 13 (the borrower must seek the permission of the courts). Also, the borrower should not have any credit issues like late payments, collections, or credit charge-offs since the bankruptcy.

Special exceptions can be made if a borrower has suffered through extenuating circumstances like surviving a serious medical condition, and had to declare bankruptcy because the high medical bills couldn't be paid monthly.

Long Term Debt

FHA Loan ratios are more lenient than a typical conventional loan.