If you’re looking to purchase a single-family home in Georgia, you could borrow up to $498,257 with an FHA loan in most counties. In some higher-cost counties, you could borrow as much as $649,750, as long as you meet minimum down payment and credit score requirements. Here’s what you need to know on how to qualify.
Getting an FHA loan can be a great way for many Georgians to finally achieve the dream of homeownership. FHA loans require lower down payments and credit scores compared to conventional loans. However, you still need to meet certain qualifications set by the Federal Housing Administration to get approved.
In this comprehensive guide we’ll cover everything you need to know about FHA loan qualifications in Georgia for 2024 including
- FHA loans overview
- Benefits of FHA loans
- FHA loan limits in Georgia
- Minimum FHA credit score requirements
- Down payment options with FHA loans
- Debt-to-income ratio limits
- Alternative FHA qualifying options
- How to improve your chances of approval
Let’s get started!
What Are FHA Loans?
FHA loans are government-backed mortgages insured by the Federal Housing Administration (FHA), part of the Department of Housing and Urban Development (HUD).
Because the FHA insures these loans, lenders can offer more flexible qualifying criteria compared to conventional mortgages. This allows more borrowers to qualify, especially first-time homebuyers.
Some key things to know about FHA loans:
- Require only 3.5% down payment on purchase loans
- Allow gift funds for down payment from family members
- Offer fixed and adjustable rate terms up to 30 years
- Can be used to purchase or refinance a primary residence
FHA loans are provided by private FHA-approved lenders. You apply through them like any other mortgage.
Why Choose an FHA Loan?
There are many reasons why an FHA loan is a great financing option for Georgia homebuyers:
Lower Down Payments
FHA allows down payments as low as 3.5% of the purchase price. This smaller down payment really helps first-time buyers who don’t have 20% to put down on a conventional loan.
FHA even allows gift funds from relatives or non-profits to cover your entire down payment.
More Flexible Credit Requirements
FHA sets a minimum credit score of just 580 to qualify. And they look at your overall credit profile, not just your score. With good credit factors, you can get approved with scores even below 580.
Lower Mortgage Insurance
FHA loans require mortgage insurance no matter your down payment size. But FHA mortgage insurance rates are lower than with conventional loans. This makes payments more affordable.
Simple Qualifying Criteria
FHA uses simple, clearly-defined eligibility standards. This makes it easier to determine if you’ll qualify for the loan upfront.
Available for First-Time Homebuyers
FHA loans can be used by first-time buyers who haven’t owned a home in the past 3 years. Conventional loans often have stricter requirements for new buyers.
Nationwide Availability
FHA loans are available in all 50 states. Lenders in every area of Georgia offer FHA mortgages. This nationwide availability and consistency helps ensure an easier process.
Refinancing Options
FHA isn’t just for purchase mortgages. You can also refinance into an FHA loan to get a lower rate or cash-out equity.
FHA Loan Limits in Georgia
The first FHA qualification to look at is whether your loan amount will fall under the local loan limit.
FHA sets maximum mortgage limits for each county and the type of home. For a single-family home in 2024, FHA loan limits in Georgia are:
- Lowest Limit: $498,257 (For example, Appling County)
- Highest Limit: $649,750 (For example, Barrow County)
You can look up the exact limits by county here. Loan limits range from $498,257 up to $649,750 depending on the location.
The highest limits apply in the Atlanta metro area and surrounding suburban counties. Lower FHA limits apply in rural Georgia counties.
Tip: FHA limits are highest for 2–4 unit homes. You can qualify for loans over $800k with a 4-plex!
Minimum FHA Credit Score Requirements
The next FHA loan requirement to meet is your minimum credit score. This gauge’s your creditworthiness and ability to manage mortgage payments.
The minimum FHA credit score set by HUD is:
- 580 for 3.5% down payments
- 500 for 10% down payments
But in reality, most lenders require:
- 600 FICO for 3.5% down
- 580 FICO for 10% down
So you’ll want to aim for an FHA minimum credit score of 580. The higher, the better your interest rate and overall eligibility.
FHA looks at your overall credit profile, not just your score. If you don’t meet the score requirement but have good credit history, you may still qualify by manual underwriting.
Down Payment Options for FHA Loans
As mentioned, standard FHA loans allow a minimum down payment of 3.5%. But you have options to change the down payment if needed:
3.5% Down Payment
The most common FHA down payment is 3.5%. This allows the best interest rates and requires the lowest mortgage insurance.
With 3.5% down, you can gift your entire down payment from family or other sources.
10% Down Payment
Putting 10% or more down lowers your mortgage insurance and monthly costs. This option has higher credit score requirements.
0% Down with Georgia Dream FHA Loan
In Georgia, the Georgia Dream FHA loan program offers down payment assistance grants.
Qualified buyers can get loans covering 100% of the home price with this 0% down mortgage option.
Debt-to-Income Ratio Limits
Your debt-to-income (DTI) ratio compares your total monthly debts with your gross monthly income. It shows the percentage of income going to debts.
FHA sets maximum DTI limits of:
- 31% of gross income for housing costs (mortgage, taxes, insurance, HOA fees)
- 43% for total debt (adding other debts like car loans, credit cards, child support)
You can exceed 31% with compensating factors like excellent credit or significant reserves. But staying at or below these ratios helps your approval odds.
Alternative Qualifying Options
If you don’t meet standard FHA requirements, alternative options can help you still qualify:
Manual Underwriting
Manual underwriting looks past your credit score at your entire credit history and profile. Strong past credit can help you qualify for an exception.
Non-Occupant Co-Borrowers
Adding a co-borrower who won’t live in the home boosts your qualifying chances. Their income, assets, and credit are combined with yours.
Nontraditional Credit
Without sufficient credit history, nontraditional credit sources can establish your creditworthiness. These include rental payment history and utility bills.
Talk to your lender to see if an alternative qualifying option fits your scenario.
How to Improve Your Chances of FHA Approval
If your qualifications fall short, take steps to improve your FHA loan eligibility:
- Pay down revolving debts to lower credit utilization
- Maintain on-time payment history
- Limit new credit inquiries before applying
- Build up savings for a larger down payment
- Reduce monthly debt obligations
- Enroll in homebuyer education courses
Even small improvements can bump your credit or income enough to meet requirements!
Ready to Apply for an FHA Loan in Georgia?
Connect with a lender to check your eligibility and get pre-approved. They can guide you through the qualification process.
With an FHA loan, your dream of owning a home in Georgia may be more achievable than you think!
How to qualify for an FHA loan in Georgia
The highest amount you can borrow with a FHA-backed loan for a single-family unit in Georgia is $649,750. Requirements are generally less stringent than for conventional loans. To qualify, you’ll have to meet the following minimum FHA home loan requirements:
→ Minimum down payment and credit scores. If your credit score is at least 580, you only need a 3.5% down payment. However, you could qualify with a credit score as low as 500 if you’re able to provide a 10% down payment.
→ Debt-to-income (DTI) ratio. Your monthly debt payments divided by your before-tax income is your DTI ratio, which most lenders prefer to be under 43%. However, if you have a high credit score, extra savings or a large down payment, some lenders may make an exception.
→ Mortgage insurance. To qualify for an FHA loan, you must purchase two types of mortgage insurance. One type is an upfront mortgage insurance premium (UFMIP) that is rolled into your mortgage and costs 1.75% of your loan amount. The other type is an annual mortgage insurance premium (MIP) that costs 0.45% to 1.05% of your loan amount and is paid out monthly on top of your mortgage payments.
→ FHA home appraisal. You’ll need to purchase an FHA home appraisal to buy a home with an FHA loan. This involves more stringent requirements than with conventional loans and includes both market research and a physical inspection of the building and property site.
→ Occupancy requirements. FHA has strict rules against house-flipping, so you’ll have to live in the home you purchase as your primary residence for at least 12 consecutive months.
How are FHA loan limits determined?
FHA loan limits are determined every year by the U.S. Department of Housing and Urban Development (HUD). The amount you’re allowed to borrow for an FHA-backed loan may differ from county to county and depends on changes to median home prices in the previous year.
FHA loan limits are based on a percentage of the conforming loan limits for conventional mortgages. For 2024, the FHA “floor” or lowest FHA loan limit, is set at $498,257. This figure is 65% of the national conforming limit of $766,550 for a single-family home in most areas of the U.S.
The FHA “ceiling,” or highest loan limit, is 150% of the national conforming limit and reflects market conditions in regions with higher housing prices. In 2024, the ceiling is set at $1,149,825 for a single-family unit.
Georgia FHA Loans – who are the lenders?
FAQ
What will disqualify you from an FHA loan?
What is the minimum credit score for a FHA loan in Georgia?
What are the minimum requirements for an FHA loan?
Is it harder to qualify for an FHA loan?
Can I get an FHA loan in Georgia?
To qualify for an FHA loan in Georgia, your home loan must be below the local FHA loan limits in your area. For 2024, the maximum loan limit in Georgia is $498,257 for a single-family home and $1,249,550 for a four-plex. Limits varies by county. The minimum loan limit is $5,000. Loan limits vary by county and home size.
What are the FHA loan requirements in Georgia?
Here are some key FHA loan requirements in Georgia to keep in mind: Credit score: While the FHA is known for its leniency regarding credit, a minimum credit score is often required. Typically, a score of 580 or higher is required to qualify for the low 3.5% down payment, but Griffin Funding can accept borrowers with credit scores as low as 550.
How much can you borrow with a FHA loan in Georgia?
The highest amount you can borrow with a FHA-backed loan for a single-family unit in Georgia is $649,750. Requirements are generally less stringent than for conventional loans. To qualify, you’ll have to meet the following minimum FHA home loan requirements: → Minimum down payment and credit scores.
What is the Georgia FHA mortgage program?
The Georgia FHA mortgage program provides several benefits, keeping in mind the budget difficulties of many homeowners who are considering purchasing their first home. Compared to most traditional mortgage loans, the FHA mortgage loan simplifies the process for the buyer.