FHA has no mimimum mortgage requirement, but banks will only make a loan for so little?

Posted on Oct 14, 2012 in FHA Information

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Question by Go with the flow: FHA has no mimimum mortgage requirement, website but banks will only make a loan for so little?
True or False.

Let’s say you find a house for $ 8, information pills 000
From what I have read, there FHA does not have a minimum requirement.
But, from what I have read most banks do not make mortgages for loans under 40K or 50K. My guess is all the paperwork and costs would be too great for an amount so small.

Anyone an expert on this?
I am sure there are banks out there that will do mortgages for only 30K, but I can’t imagine it being worth their time to do a mortgage for less

Best answer:

Answer by djstwain
As with any business they get to decide what loans will make them money. When you take into consideration the cost of doing business, it may not makes sense for them to write a loan for under $ 20,000. I would try a credit union or local regional bank.

What do you think? Answer below!

4avg.rating 16 votes.


  1. True. paperwork costs for a mortgage donm’t break even at that small an amount.

  2. Most banks won’t do really small mortgages b/c they don’t make enough money on them to make it worthwhile. So you are right.

  3. As a mortgage lender it would cost us more to process a loan under 50k than we can make under FHA guidelines. My company has a minimum of 50k & we barely break even. The paper work required/labor/processing costs more than the amount we would make.