New Jersey FHA Loan | Requirements | Lending Limits | Apply
Our goal is to provide you with all of the information and tools you need in order to determine if a FHA loan is right for you. On this page, you can view the 2017 New Jersey FHA loan guidelines, view loan limits by county, and calculate your monthly payment. These guidelines include the FHA requirements related to credit history, income, employment, and the type of property you want to purchase. After reading the loan requirements and loan limits, you can use our detailed FHA calculator, which will allow you to see what your monthly payment, mortgage insurance, and monthly escrow will be.
One of the most common questions people ask is regarding where in New Jersey FHA loans are available. They are available throughout every county of the state, and you can view the max lending limits for your county below. FHA mortgages are especially popular in urban areas, such as: Camden, Cherry Hill, Clifton, Edison, Elizabeth, Jersey City, Newton, Toms River, and Woodbridge. You can finance a home purchase with a FHA loan in a rural area as well though.
New Jersey FHA Loan Requirements
Keep in mind that each application is looked at individually, and FHA loans have a considerable amount of leniency in what is required for an approval. There are some concrete loan requirements set out by the FHA though, which dictates what loans they will insure. The following information is written in the context of buying a home with a FHA loan. If you already have a FHA loan, or if you wish to refinance into a FHA loan, please click here to learn about FHA refinancing.
The mandatory New Jersey FHA loan requirements for a home purchase are as follows:
- Primary Residence – You must occupy the home that you intend to purchase and have it be your primary residence. The FHA does not insure investment properties. Multifamily homes are allowed, which can have up to 4 units, but you must occupy at least one of them for it to be eligible for a FHA home loan in New Jersey.
- Credit Score – A credit score of 620 or higher is needed for FHA loans. This includes first time home buyer mortgages, repeat buyer loans, and any FHA refinance program.
- Job History – Proof of employment for 2 years is required. It is ok if you have changed jobs, but you need to show consistency of income.
- Income Documentation – Paystubs and tax returns are required to show employment income, as well as bank statements, including your checking or savings accounts.
- DTI Ratio – Your monthly debts, including your new mortgage payment, must not exceed 43% of your bring home income. What you want to do is calculate all of your current monthly debts (do not include anything that does not show on your credit report – only those that appear on a credit report are counted). Then, take the total of your current debts, plus what your expected new mortgage payment, and get a total. Let’s say your current monthly debts are $750 and your new mortgage payment will be $1,000/month. Your total monthly debts would be $1,750. Compare this amount to your monthly income to calculate your DTI ratio. Your monthly debts compared to your monthly income shall not exceed 43% for you to qualify for a FHA loan.
You can calculate your new FHA payment below. Not sure what your FHA interest rate will be? We can provide you with a free consultation and rate quote.
FHA Mortgage Calculator
Total Monthly Payment
|FHA base loan amount||$0|
|FHA upfront MIP 1.75%||$0|
|FHA total loan amount||$0|
|Principal & interest||$0|
|FHA MIP 0%||$0|
- Price of Home – Enter the price of the home you want to buy. If you do not have a home in mind yet, just add in a number in the range you expect to want to buy a home for.
- Mortgage – The second field titled “mortgage”, is by default on a 30 year fixed loan schedule. This is the most common loan repayment schedule selected for FHA loans. You can change it to 20 years, 15 years, or 10 years if you want a shorter loan amortization.
- Interest Rate – The interest rate a borrower receives depends on their credit, income, and other qualifying factors. To get an actual rate quote, you will need to speak with a licensed loan officer. You can call 1-800-731-3560 to speak with a loan specialist to get prequalified and receive a rate quote.
- Down Payment – FHA loans require a 3.5% down payment. If you would like to put more down, add in more into the down payment field. Please note that not everyone will qualify for a 3.5% down payment, and of course, not all applicants are approved for a loan at all. The 3.5% is the amount that many FHA loan applicants will be allowed as a minimum down payment.
- Property Taxes – Add the annual taxes for the home you want to buy. To find out how much the annual property taxes are, check with the county accessor. You can also ask a real estate agent to help you find out what the exact annual property taxes are for a home you are interested in.
- Annual Insurance – The amount that the annual homeowners insurance will cost depends on the property you intend to buy, your homeowners insurance claim history (if you have owned a home before, and had to make a claim), and the specific homeowners insurance company that you select to insure your home.
- Down Payment – This is the percentage that is calculated based upon the home purchase price and the down payment amount.
After summiting information into these fields, it will calculate how much the FHA mortgage payment will be based upon these numbers. The next set of data presented on the right side and shows under the total monthly payment is as follows:
- FHA Base Loan Amount -This is the amount of your loan after subtracting your down payment from the total, but prior to adding in the FHA upfront mortgage insurance premium (UPMIP).
- FHA Upfront MIP – All FHA loans require a 1.75% upfront mortgage insurance premium to be paid. This is calculated from the base loan amount. This 1.75% is the same for any borrower and on any type of FHA loan. It does not vary from one FHA lender to another.
- FHA Total Loan Amount – This is the combined total of your FHA base loan amount (after subtracting the down payment), along with the FHA UPMIP. You have the option to pay the FHA UPMIP amount out of pocket, or you can wrap it into the loan amount. Most decide to include it in the loan amount, so we have it automatically added on the calculator.
- Principle and Interest – This is the amount of your mortgage payment before adding mortgage insurance, and property taxes, and property insurance.
- FHA MIP – This is the monthly mortgage insurance premiums required on all FHA loans. The amount depends on the type of loan, how many years the repayment schedule is (such as 15 years or 30 years), and the loan-to-value (LTV) ratio. A 15 year loan with a LTV less than 90%, the monthly MIP will be 0.45%. A 15 year loan with a LTV greater than 90%, the monthly MIP will be 0.70%. For a 30 year loan with a LTV less than 95% the monthly MIP is 0.80%. For a 30 year loan with a LTV greater than 95%, the monthly MIP is 0.85%.
- Monthly Escrow – This is how much your property taxes and property insurance is after taking the annual amounts and dividing them by 12 monthly payments.
New Jersey 2017 FHA Loan Limits
You can view the loan limits for your county below. Match the number of units the property you want to buy has with your county. A single family has 1 unit, a 2 family has 2 units (duplexes), a 3 family has 3 units (triplex), and a 4 family property has 4 units (fourplex).
|County||Single Family||2 Family||3 Family||4 Family|