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Ivan Diaz's Blog

By Ivan Diaz | Mortgage Broker
or Lender in Castro Valley, CA

Low Down Payment Financing Options

Are you aware that there are at least 4 low down payment financing options? If you are limited to a down payment between 3-5% you will be surprised at how affordable buying a home really is. Compare these options below and research the details for the product that best fits your needs.

Traditional FHA - 3.5% Down by far the most popular program out. 
Pros - Best rate out there of all 3 programs. Ask for a lender credit! Pricing is generous.
- Most lenders do not have a fico add-on for scores below 640/660 and some with none.
- Allows for some credit exceptions- non-traditional credit allowed.
- You can add the costs and fees to your loan amount. 
Cons - Hefty Upfront Mortgage Insurance of 1% is going up to 1.75% on some LTV's
- Monthly mortgage insurance in addition to up front fee.
- Condo's must be FHA approved ahead

CalHFA FHA - 1% Down or $1000 minimum investment (going away!)
Same Pros/Cons with minor details below
Additional Details- FHA combined with CHDAP (down payment assistance)
- Silent Second of 3% - no payments on this loan!
 - First time home buyer only
 - Income limits based on individuals in household and county guidelines

3% or 5% down Conforming program w/ Lender paid Single Premium Mortgage Ins
Pros - Rates and Add-ons are based on a traditional programs. Low Rates!
- No monthly Mortgage Insurance
- 3% seller paid concessions allowed
- Condo approvals allowed unlike FHA
Cons - Costs paid up front and can not be rolled in to the loan
-  Credit score sensitive- Add-ons

Fannie Mae's Homepath - 3% or 5% down (purchase only)
Pros - Rates and Add-ons are based on a traditional programs 
- No monthly Mortgage Insurance - No upfront fee
- 6% seller paid concessions 
- No Condo Approvals necessary
- No appraisal required
Cons - Costs paid up front and can not be rolled in to the loan
- Credit score sensitive- Add-ons
- Home must be Fannie Mae owned and on the list @ www.homepath.com

These are available to most individuals. These are just Bullet points and are not full guidelines nor do they represent full advantage or disadvantage. Please check individual guidelines for accuracy.

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