• Income and credit play a major role in obtaining an FHA loan.calculator image by mashe from Fotolia.com
  
  A Federal Housing Authority loan allows home buyers to make a purchase with a low down payment. FHA loans are for first-time buyers and are sometimes known as "HUD homes," because the loan is secured by the federal government through the U.S. Department of Housing and Urban Development. Because this is a government program there are basic requirements borrowers must meet to qualify for a loan, according to the Federal Housing Authority.
  
  

Income and Employment

• To qualify for an FHA loan, you must have steady employment and income. According to the FHA, two years with the same employer and two years of income that remains the same or increases is preferred. The FHA will assess your income before taxes to determine how large of a mortgage you can afford. Documentation such as pay stubs and federal income tax filings will be needed.
  
  

Credit History

• The lender will pull a credit report when you begin the loan application process. According to the FHA, the report should not have more than two 30-day late payments in the past two years. A credit score of 580 or higher is needed for the best FHA loans, which require 5 percent or less as a down payment. In early 2010, the FHA expanded its credit program to allow people with credit scores of 580 or less to obtain a loan with at least a 10 percent down payment. People with a past bankruptcy or foreclosure are eligible for a loan if the bankruptcy is more than two years old (three years for foreclosures) and credit has been perfect since, according to the FHA.
  
  

Mortgage Payments

• The FHA recommends that you spend no more than 30 percent of your gross income on a house payment. This includes the mortgage, taxes and insurance. To determine what mortgage payment you would qualify for, multiply your gross monthly income by 29 percent. In some cases, FHA guidelines will allow a borrower to spend 35 percent on the home if everything else in the loan application proves payments will be met.
  
  

Closing Costs

• FHA closing costs are regulated by HUD with maxiumum fee limits so that prices are affordable. A buyer must be able to pay closing costs when the sale is final, although some of the fees associated with the loan may be paid by the seller, according to the FHA.