How long does FHA approval take?

FHA loans are government-backed mortgages that can be a helpful option for buyers with lower credit scores. Because FHA loans are backed by the U.S. Federal Housing Agency, they are less risky for lenders. That’s because the government insures the loan if the borrower can’t keep up with payments and defaults. As a result, FHA loans come with looser eligibility criteria. But before you can get this type of mortgage, your lender will need to confirm you meet certain financial requirements and property requirements set by the FHA. Here’s an overview of the FHA loan approval timeline so you know how long you can expect the process to take.

Quick answer: Typical FHA approval timeline is 1 - 2 months

The exact amount of time it takes to get an FHA loan can vary depending on your lender and financial situation. In general, the FHA loan approval process from preapproval to closing typically takes between 30 and 60 days.

During this time, you’ll get preapproved, go house hunting, and make an offer. Once your offer has been accepted, your lender will conduct the underwriting process. If everything checks out, you’ll get final approval and close on your FHA loan.

Step-by-step timeline: What to expect

Let’s break down each part of the FHA loan approval timeline to help you better understand how the process works.

Mortgage preapproval (1 - 3 days)

The first step to getting an FHA loan is to get preapproval from a lender. A pre-approval letter tells you how much a lender is tentatively willing to loan you up to a certain amount. While preapproval is not the same as a guaranteed loan offer, it can give you a ballpark range of how much house you can afford. Preapproval also indicates to sellers that you’re serious about buying and likely able to secure financing.

Many lenders offer a prequalification option and a preapproval option. A prequalification is based on unverified financial information that you report and a credit check. Preapproval requires a credit check and verification of information about your income and assets with supporting documentation. A prequalification can take minutes, while a preapproval typically takes between 1 and 3 days.

If you’re interested in getting preapproved with Rocket MortgageÒ, learn more about our Verified Approval[1].

Full application and documentation (1 - 3 days)

Once you’ve found the right home and your offer has been accepted, it’s time to get final approval on your official FHA loan application. This is when you’ll submit all the documentation to show your lender that you can afford to repay your FHA loan. Here are some of the documents you can expect to be asked for:

• Pay stubs
• W-2 forms
• Tax returns
• Bank statements

Having these documents ready in advance can help expedite the process of getting your FHA loan.

Loan Estimate delivery (within 3 days)

Your lender is required to send you a Loan Estimate within 3 days of receiving your loan application. A Loan Estimate is a three-page form that lists all the important details about your FHA mortgage, including your estimated monthly payment, interest rate, property taxes, homeowners insurance, and closing costs. Your Loan Estimate will also indicate whether your interest rate can change and whether your mortgage has a prepayment penalty.

Home inspection and FHA appraisal (2 - 4 weeks)

The home inspection and home appraisal are both examinations of the house you’re buying, but they serve very different purposes. During the home inspection, a licensed third-party inspection will carefully evaluate the home’s condition and take note of any issues, damage, or safety hazards. During the appraisal, a professional appraiser will examine the home and compare the sales price of similar homes in the area to determine its fair market value.

The process of scheduling, completing the appraisal and inspection typically takes 2 – 4 weeks, though each should only take a few hours on the day. In order to get approved for an FHA loan, the inspector must confirm the home meets FHA property standards.  

Underwriting (about 1 week)

The underwriting process is when your lender takes a close look at your finances to determine whether you can afford to repay your FHA loan. If any issues arise or your lender requests additional documentation, underwriting could take a bit longer.

Closing on the home (1 day)

Once the lender has issued final approval on your FHA loan, it’s time to schedule the closing day. That’s when you’ll sign all the paperwork, make your down payment, and pay your closing costs. Then, the title of the home will be transferred to your name and you’ll get the keys to your new house.

What affects how fast you’re approved

Let’s go over some of the factors that impact how long it takes you to close on your FHA loan.

Credit, DTI, and down payment

To get approved for an FHA loan, you’ll need to meet the requirements set by both the lender and the FHA. You’ll need to have a credit score of at least 500 to get approved for an FHA loan. If your credit score is less than 580, you’ll need a down payment of at least 10%. If your credit score is 580 or higher, you’ll need a down payment of at least 3.5%.

Another factor that can hold up your FHA loan approval is your debt-to-income ratio (DTI). This figure reflects how much of your income is needed to cover your debts. If your DTI exceeds 50%, it could jeopardize your FHA loan approval.

Local appraisal and inspection scheduling

Your FHA loan approval timeline can also be impacted by how long it takes to schedule and complete the home inspection and appraisal. If there aren’t many available inspectors or appraisers, or it’s the busy time of the home buying season and they’re all booked up, it could delay your FHA loan approval.

Property type and FHA eligibility

If your property doesn’t meet FHA eligibility guidelines, then it can slow down your loan approval process. For example, if one of the home’s major systems is broken, lead paint is detected, or issues with the foundation are detected, repairs will have to be completed before closing. You may be able to negotiate with the seller to have them cover the costs, but the repairs could end up delaying your closing day.

How to speed up FHA approval

Here are some tips on how you can expedite your FHA loan approval timeline.

• Research FHA-approved lenders in advance.
• Compare Loan Estimates.
• Review FHA loan requirements.
• Review FHA property requirements.
• Gather the necessary documentation before you apply.
• Schedule the inspection early.

FAQ about FHA loans

Here are the answers to some frequently asked questions about FHA loans.

Does an FHA loan take longer than a conventional loan?

FHA loan approvals do not necessarily take longer than conventional loans. However, if the results of the inspection or appraisal do not meet FHA standards, it can cause delays in the approval process.

How long does it take to hear back from the FHA?

FHA loans are issued by private lenders and backed by the FHA. That means that you’ll only deal directly with the lender, not the FHA. You can expect to hear back from your lender within 1 – 3 days.

What will disqualify you from an FHA loan?

If you do not meet FHA loan criteria regarding credit score, DTI, down payment, and property requirements, you likely won’t be eligible for an FHA loan.

The bottom line: FHA loans typically take a month or two to close

If you think an FHA loan is right for you, then you can expect the process to take roughly 30 – 60 days from preapproval to closing. The most common delays are typically caused by issues that pop up during underwriting, the inspection, or the appraisal. If both you and the home meet the requirements set by the FHA and your lender, you can expect to close in a timely fashion. Ready to get started on your FHA loan application? Let the Home Loan Experts at Rocket Mortgage help.