 TITLE: What Is an FHA Loan? CONTENT: FHA Loan Requirements\n---------------------\nFHA loans have several important requirements that you should be aware of before you apply.\n*   **Minimum down payment**: You can make a down payment as low as 3.5%, though with worse credit scores, you may have to put 10% down (details below).\n*   **Debt-to-income ratio**: All mortgage lenders look at your debt to income ratio (DTI), which compares how much you pay each month for debt with how much income you bring in each month. The higher your DTI, the riskier you appear to lenders since it indicates that a large percentage of your income goes toward debt payments. To get an FHA loan, you typically can't have a DTI ratio over 43%.\n*   **Mortgage insurance**: An FHA loan requires you to pay mortgage insurance, and the cost is spread across two payment types:\n    *   One single bulk payment of 1.75% of the loan amount, which is due at closing but can be rolled into your loan financing.\n    *   An additional .45% to 1.05% of loan total, which is charged annually for the life of the loan (on loans of 20 years or more with down payments less than 5%). This fee is spread out over your monthly payments.\n*   **No recent foreclosures**: If you've had your home foreclosed, you must wait three years until you're able to qualify for an FHA loan. However, if you encounter financial hardships after buying a home with an FHA loan, the FHA has several programs designed to help keep you in your house.\n*   **Other criteria**: You also typically must have a Social Security number and proof of sufficient income or assets that indicate you can afford the mortgage and your other debt obligations. END