A car and a home are the two largest purchases most people will make. While there are plenty of options for getting a car loan even if you have less than perfect credit, the housing market collapse has made it harder for those with credit problems to qualify for conventional mortgages. However, the Federal Housing Authority (FHA) has programs designed to help those who are in less than ideal circumstances get the mortgage they need. An FHA loan is somewhat different than a conventional mortgage, so it is important to know how to get approved for an FHA loan.

Pre-Approval is Key

Getting pre-approved for your FHA mortgage will let you shop for your new home with confidence. The first step is finding out which lenders in your area are FHA-approved. You must apply through one of these approved lenders. Set up appointments with a few of these lenders to start your loan application. Because of the length of time this can take, you should start doing this at least three to four months prior to when you want to look for a new home. You should bring the following information to your appointment:

• Current paycheck stubs
• Two years of tax forms and W-2s
• Confirmation that you have been employed at the same job for at least two years
• Proof of your down payment

Your lender will review these documents and your credit report with you to let you know if there are any issues you need to address before you can be approved for an FHA mortgage.

Finding a Home

Once you are approved, your lender will provide you with a pre-approval letter your realtor will be able to provide to a seller to help entice them to accept your offer. You should make sure your realtor knows that you will be using an FHA mortgage to purchase your home. There are certain criteria any home must meet in order to gain final approval by your FHA lender.

Getting approved for an FHA loan with bad credit takes some time but can make it possible for you to buy your own home despite credit problems. Making regular mortgage payments can also make it possible for you to qualify for an affordable car loan down the road. With a little work, you can make both of these large purchases and set yourself up for a bright financial future.