FHA Loan Source of Income Question

[Claudia Acanda]

Hi everyone, 

I am currently looking into the FHA loan and wanted to use it to purchase my first property (duplex) with it however, I do not have a source of income (I am currently attending graduate school) but I can have a co-signer. Can I still quality for this FHA loan or is their other options I can use/ do since I have no income?

Thank you in advance for your help/advice.

[KC Pake]

Quote from @Claudia Acanda:

Hi everyone, 

I am currently looking into the FHA loan and wanted to use it to purchase my first property (duplex) with it however, I do not have a source of income (I am currently attending graduate school) but I can have a co-signer. Can I still quality for this FHA loan or is their other options I can use/ do since I have no income?

Thank you in advance for your help/advice.

Hi Claudia,

Please a list of my thoughts below:

Co-signers Allowed: FHA loans permit co-signers, whose income and credit will be considered.
Income Proof: You'll need to show a stable income, for which your co-signer's income might qualify.  Remember if you have no income source, they will need to qualify with their Debt To Income (DTI) alone.
Credit Requirements: Good credit scores improve approval chances; both you and the co-signer's credit histories matter.
Debt-to-Income Ratio: Typically, a maximum 43% DTI is required, comparing debt payments to monthly income.
Down Payment: A minimum of 3.5% down payment is needed for credit scores 580 and above; 10% for 500-579 scores.
Residency: You must occupy the duplex as your primary residence for at least a year.
Property Standards: The duplex must meet FHA's safety and structural standards.
Alternatives: Consider other loan options like conventional loans or first-time homebuyer programs if FHA isn't suitable.

Best of luck,
KC