FHA Loan Income Requirements for 2024

January 15, 2024 - 8 min read

What is an FHA mortgage?

An FHA mortgage is a government loan insured by the Federal Housing Administration. However, the FHA doesn’t issue funds, so you must apply through an FHA-approved mortgage lender.

This is a popular mortgage program due to its low credit and down payment requirements. But while available to most borrowers, not everyone meets the qualifications for an FHA loan.

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Is there a minimum income requirement for FHA loans?

While FHA loans don’t have a specific minimum income requirement, qualifying for an FHA loan will require earning enough money to cover the monthly mortgage payment.

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The income can come from a variety of sources, and it’s your mortgage lender’s job to verify that your income is consistent and sufficient. However, a stable income alone isn’t enough to qualify for an FHA home loan. Your lender takes other factors into consideration, including your current debt load, credit history, and the type of mortgage you are applying for.

The amount owed on other loans and credit cards can impact mortgage affordability. Typically, the more debt you have, the less you qualify for.

FHA loan income requirements in 2024

FHA mortgage loans don’t have an income requirement. These home loans are available to lower-income, moderate-income, and higher-income earners.

For this reason, FHA loans are popular among first-time homebuyers and repeat buyers— as long as their income is enough to support monthly mortgage payments for the foreseeable future.

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What sources of income qualify for an FHA loan?

Only a mortgage lender can determine whether your income is sufficient for a certain loan amount. To make this determination, they’ll ask for income documentation.

You can apply for an FHA loan whether you’re a full-time or part-time worker, self-employed, or receive other income (investment, retirement, rental income, Social Security, or support payments).

Verify your FHA loan eligibility. Start here

The documents you’re required to submit will depend on your personal circumstances. However, typical documentation includes:

  • Recent paycheck stubs
  • Recent W-2 or other proof of income
  • Tax returns from the previous one or two years
  • Bank statements and other assets
  • Credit history

If you’re self-employed, your lender might also require a year-to-date Profit and Loss statement.

You can also count support payments as income, such as alimony and child support. To use these payments, you must show proof of receiving them for at least six months. These must continue for at least three years after closing.

Your mortgage lender will also require a stable employment history. This typically includes two years of consecutive employment without any gaps (or one year if you’ve recently graduated college).

If you don’t have a two-year job history, it’s still possible to qualify for a mortgage.

Are there income limits for an FHA mortgage?

There’s also no maximum income requirement for an FHA loan, so you don’t have to worry about earning too much to qualify. These loans are ideal for those who want a lower down payment, and for those with lower credit scores.

However, if you are using a down payment assistance program, you could be subject to certain income limits in your local county.

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General FHA loan requirements

Before applying for an FHA loan, familiarize yourself with the general program requirements.

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FHA loan minimum credit score requirements

You can qualify for an FHA loan with a credit score as low as 500, although some lenders might require a minimum score of 580. This is lower than other programs like conventional and USDA loans, which typically require a minimum credit score of 620 and 640, respectively.

FHA loan minimum down payment

FHA loans also have lower down payment requirements. Your down payment is based on your credit score. Borrowers with a credit score of at least 580 can purchase with a 3.5% down payment. If your credit score is between 500 and 579, you’ll need a minimum down payment of 10%.

FHA loan debt-to-income ratio

Keep in mind, your debt-to-income ratio, or DTI, must fall within the FHA guidelines to qualify. DTI ratio is the percentage of your gross monthly income spent on monthly debt payments.

FHA home loans have more lenient qualification requirements than other loans. One great benefit is that FHA mortgages typically allow a DTI ratio up to 43%. Your mortgage lender might even permit a higher ratio (up to 50%) if you have an excellent credit history or a sizable cash reserve.

You can calculate your debt-to-income ratio by dividing your monthly debt payments by your monthly gross income. For example, if you have a monthly income of $5,000 and your total monthly debt is $1,500, you have a debt-to-income ratio of 30%.

FHA mortgage insurance

All FHA loans require mortgage insurance, regardless of down payment size. This is unlike conventional loans which only require private mortgage insurance when purchasing with less than 20% down.

Typically, FHA mortgage insurance is for the life of the home loan. The only way to remove private mortgage insurance is to refinance to a conventional mortgage once you have 20% equity. The only exception is when you make a 10% down payment. In this case, you’ll only pay mortgage insurance for the first 11 years.

Do FHA loans have better interest rates?

Because FHA loans are government-backed, they are considered lower risk to mortgage lenders. This allows lenders to provide borrowers with below-market rates compared to other mortgages. However, whether or not your FHA mortgage rate will be more competitive will depend on your financial profile.

What are the FHA loan limits in 2024?

Even though FHA loans don’t have minimum or maximum income requirements, they do have loan limits. The loan limit for a single-family home is $498,257 in most counties, and up to $1,149,825 in high-cost areas.

Begin your FHA loan application process. Start here

Other requirements to qualify for an FHA mortgage

Other requirements to keep in mind when applying for an FHA mortgage include:

  • You must use an FHA loan to purchase a primary residence
  • You can use a gift for your down payment and closing costs (from acceptable donors)
  • The property can’t be an investment property, unless you’re buying a multi-unit home and living in one of the units
  • At least one borrower must move into the property within 60 days of closing, and agree to live in the property for at least one year
  • In addition to monthly mortgage insurance, FHA loans require a one-time upfront mortgage insurance premium (MIP) equal to 1.75% of the loan amount (rolled into the loan balance).
  • You must wait three years after a foreclosure to apply for an FHA loan, and at least one to two years following a bankruptcy

FHA loan income requirements FAQ

What exactly is an FHA loan?

An FHA loan is a mortgage insured by the Federal Housing Administration. It’s aimed at making homeownership more accessible by offering flexible credit and income requirements compared to conventional loans.

Is there a minimum income requirement for FHA loans?

No, FHA loans don’t have a set minimum income requirement. However, lenders will assess your income in relation to your monthly debts. They’ll look at your debt-to-income ratio (DTI) to determine if you can manage your mortgage payments.

How do lenders calculate my income for an FHA loan?

Lenders will review your pay stubs, W-2 forms, and tax returns to calculate your income. They consider your gross income, which includes regular wages, overtime, bonuses, commissions, and other sources.

What's the maximum debt-to-income ratio allowed for FHA loans?

The maximum debt-to-income ratio varies, but it generally falls between 43% and 50%. This means your total monthly debts, including the new mortgage payment, should not exceed a certain percentage of your gross income.

Can I include my spouse's income on an FHA loan application?

Absolutely. You’re more than welcome to include your spouse’s income on your FHA loan application. It can boost your overall borrowing capacity and potentially help you qualify for a higher loan amount.

Are there specific income requirements for self-employed borrowers?

Self-employed borrowers may face additional scrutiny during the loan approval process. Lenders typically review at least two years of tax returns to determine an average income and stability.

Can part-time employment help me qualify for an FHA loan?

Yes. Part-time employment can definitely count towards qualifying for an FHA loan. Lenders will review your income history and determine if it’s stable enough for you to afford the mortgage payments.

Are there income limits for FHA loans?

No, FHA loans don’t have strict income limits. However, they do have loan limits that vary by county. These limits set a maximum loan amount you can borrow under the FHA program.

The bottom line

While FHA loans aren’t for everyone, they can make a great choice for first-time home buyers with less-than-ideal perfect credit reports and limited down payment funds.

If you think an FHA loan is right for you, connect with a mortgage lender to discuss your options. They’ll help you decide whether this type of mortgage is a suitable choice for your financial situation. Ready to get started and become a homeowner?

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Valencia Higuera
Authored By: Valencia Higuera
The Mortgage Reports contributor
Valencia Higuera is a freelance writer from Chesapeake, Virginia. As a personal finance and health junkie, she enjoys all things related to budgeting, saving money, fitness, and healthy living.
Aleksandra Kadzielawski
Updated By: Aleksandra Kadzielawski
The Mortgage Reports Editor
Aleksandra is the Senior Editor at The Mortgage Reports, where she brings 10 years of experience in mortgage and real estate to help consumers discover the right path to homeownership. Aleksandra received a bachelor’s degree from DePaul University. She is also a licensed real estate agent and a member of the National Association of Realtors (NAR).