Most borrowers looking for a mortgage don’t have sufficient credit history to provide a lender with a rational rating. This is not a problem!

The good news is that FHA loan eligibility accepts non-conventional credit when you do not have sufficient trade lines with Equifax or Trans Union.

What is the secret to it?

Nor-Conventional Credit References

FHA requires you to have three credit references that come from two different sources of non-conventional credit.

Group One – This first group of references is more weighted than that of the previous group and is considered to be a better predictor of your credit worthiness.

Utility payments such as electric, water, and gas are included in the first group. The first group can also include rental payments, cable TV bills, and telephone.

Group Two- FHA is possible by including payment references such as payment to daycare, insurance payments and internet phone calls. A 12-month bank statement showing the history of deposits can also be included. This will illustrate an increase in balance. This group allows for individual loans, provided that both parties are able to document and sign the terms.

How to apply for FHA Home Loan

You must prove that you are reliable, that you have a stable job, and that you are currently employed to be eligible for FHA home loan.These are the things you must provide when you apply for FHA Home Loan:

1. Your previous addresses must be presented within two years. You must include both addresses if you were married with different addresses.
   2. Two years of employment history must be available. This includes your employer’s name and addresses, as well as your gross monthly income.
   3. Your income tax form and your W2 for the past two years are required.
   4. You will need to include your discharge papers if you are a veteran as proof of your status as a vet.

To be eligible for financing through the FHA, you must show that you are a reliable credit holder in the past two years.

To do so, you must pay off your existing debts and avoid major credit purchases like buying a car. You also need to stay with one employer. FHA home loan can be easier than dealing with a private lender, but it is not free. You must have stable employment, dependability, and the ability to pay on-time.

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