FHA Loans Are Better For Recent College Grads.

Pic credit to T0zz

FHA loans offer more flexible options and guidelines for a college grad who is now a prospective homebuyer looking to secure a California mortgage.

If a borrower has less than a full time 2 year work history, FHA will allow school attendance history toward the 2 year work history.  So if a college graduate who has been in the work force for less than one year can use their school attendance for the other year to make for 2 years.  Many conventional FNMA lenders do not allow this.  It does help if the graduate’s degree is in the same line of work in which they studied, but not required.

FHA also allows for a longer employment gap as well.  So if the graduate took some time off after graduating before looking for work FHA is a bit more lenient on that than conventional lending.

FHA also allows for non-occupant coborrowers, conventional does not.  Mom and Dad may be tapped out from paying for school and can’t give that hefty cash gift to help buy a home, but with FHA they can go on the loan to help qualify without having living in the property or give the large cash gift to help qualify for the California home loan.

FHA has had the above guidelines for years but it’s easy to forget them.  Fannie Mae and Freddie Mac guidelines are constantly changing and hard to keep up with like the Khardashians!  Just keep in mind that FHA is college grad friendly and generally has looser guidelines without compromising the interest rate.

Here’s a few other tips a first time California home loan borrower needs to know, click here for a quick read.

If you have any questions in regards to this article click here to let me know your scenario!


Kevin Walton


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