How Long Does an FHA Loan Take to Close? A Detailed Look at the FHA Closing Timeline

Getting a mortgage through the Federal Housing Administration (FHA) can be a great option for many homebuyers, especially first-timers. FHA loans require lower down payments and credit scores compared to conventional mortgages. But because of the extra steps involved, you may be wondering – how long does it actually take to close on an FHA loan?

In this comprehensive guide we’ll walk through the entire FHA loan timeline from start to finish. We’ll look at the different factors that can impact closing times and provide tips for expediting the process.

Overview of FHA Loan Closing Timelines

So how long does it take to close on an FHA mortgage? The latest data from the Federal Housing Administration shows that on average FHA loans close in around 45 days. Here’s a breakdown

• For FHA home purchases, the average timeline is 44 days from application to closing.

• FHA refinances take slightly longer at an average of 48 days to close

This 45 day timeframe is an average across all FHA loans. Actual closing times can range from as little as 2-3 weeks to as long as 2-3 months depending on your specific situation. The processing and underwriting steps are what really determine your personal timeline.

The FHA Mortgage Process Step-by-Step

To understand what dictates FHA closing timelines, let’s walk through what’s involved from start to finish:

1. Application & Documentation

This step involves completing your loan application and submitting all required documentation to your lender. This includes pay stubs, tax returns, bank statements, and other financial info.

Timeline: 1-2 weeks

2. Processing & Underwriting

The lender reviews your application and verifies all documentation. The file then goes through underwriting where the underwriter ensures you meet FHA requirements.

Timeline: 2-6 weeks

3. Home Appraisal

An FHA appraiser will visit the property to determine its value and ensure it meets FHA property standards.

Timeline: 1-2 weeks

4. Final Approval

The underwriter gives final approval once the appraisal comes back acceptable.

Timeline: 1-2 days

5. Closing Disclosures

Closing disclosures are prepared and sent to you at least 3 days before closing.

Timeline: 3 days

6. Loan Closing

You’ll sign the final loan documents and get the keys to your new home!

Timeline: 1-2 days

While every loan is different, you can expect anywhere from 4-8 weeks for a smooth FHA closing. Here are some of the biggest factors that impact timelines:

Factors That Delay FHA Loan Closing Times

1. Lengthy Underwriting Period

FHA underwriting is the most critical step dictating how fast or slow the process moves. If the underwriter needs clarification or additional documents, it can cause delays. Sloppy paperwork on the lender’s end can also slow things down in underwriting.

How to speed it up: Provide requested info ASAP and ensure your lender has all required documents upfront.

2. Low Appraisal Value

If the appraisal comes back lower than expected, you’ll have to make up the difference in cash or negotiate with the seller. Getting a re-appraisal can also hold up the process.

How to speed it up: Aim to buy under market value to avoid appraisal issues.

3. Home Inspection Repairs

If repairs are required to meet FHA standards, you’ll need time to complete them before final approval. Negotiating who pays can also cause delays.

How to speed it up: Proactively make any repairs needed before inspections.

4. Shopping Around Too Much

Each new loan application triggers new credit checks and paperwork. Too many in a short timeframe can slow things down.

How to speed it up: Prequalify with 1-2 lenders only to minimize new credit inquiries.

Tips for Expediting Your FHA Closing Timeline

Here are a few key strategies you can use to help speed up the FHA loan process:

• Get pre-approved – Being pre-approved shows sellers you’re ready to move quickly. It also gets your documentation in order early.

• Stay organized – Keep all requested paperwork and documents in one place for easy access. Being disorganized can delay processing.

• Stay in contact – Regularly communicate with your loan officer to ensure nothing is missing or holding up approvals.

• Shop ahead of time – Have your home inspection and appraiser lined up in advance so they’re ready to go once underwriting is complete.

• Be flexible on timing – Aim for 30-45 day closings to allow buffer time for any hiccups in the process.

Closing Thoughts

The average FHA loan takes about 45 days to close, but timelines can vary substantially based on your specific circumstances. While you don’t have control over every factor, being organized, flexible, and proactive can help expedite your FHA loan closing. Maintaining open communication with your lender is key.

With a good understanding of what’s involved and the timeline variability, homebuyers can feel confident taking advantage of FHA financing. Lower down payments and flexible credit requirements make FHA loans ideal for many first-time buyers. While closings may take slightly longer than conventional mortgages, the benefits often outweigh the tradeoff for faster timelines.