Hi Zaid,

There are constraints on the 5% conventional money. They vary though from lender to lender, and many lenders are not offering it. Did you call either of the lenders I gave recommended you speak to?

Regards,
Andy

Andy is right. But don't forget 3% downpayment and no mortgage Insurance through Home Path financing.
contact me for more...

Just curious, if one goes with a 5% down Conv loan for a TH, are their any constraints for a buyer to fulfill? thanks.

Mr. Krumholz hit it right on the head. As long as it's a townhouse, you should consider FHA. Becareful with properties that state townhouse, but are condo's. Condo's have to be FHA approved. The difference? The townhouse, you own the land it sits on and the exterior wall/roof. In other words if those things need repairs, you fix it. Condo: You own everything inside the walls. You own the building as an association and therefore pay a much higher association fee. Condo's also only require 3.5% down for FHA. You may still purchase conventional with minimum 5% down with 640 credit scores. Most FHA lenders are increasing their minimum score to 640 but there are still some out there with 620 minimum scores.

Hi Zaid,

There are three ways to do a 5% down payment (DP) or less these days. The obvious answer is to do an FHA loan which requires a minium of 3.5% down payment. You can put down more then 3.5%, that is just the minimum DP required. If you're a first time buyer, you may also qualify for FHA+ plus loan. This combines an FHA loan with VHDA (Virginia Housing Department) loan that actually allows you to finance up to 101.5% of the purchase. The extra 1.5% can go towards closing costs. The third financing method, is do a conventional loan with a 5% DP. Not all lenders offer this, but if you qualify, it is obtainable.

I hope this helps you. If you need a couple of good lenders who can do these loans or answer any additional loan questions you might have, please feel free to contact me.

Regards,
Andy Krumholz, GRI, CDPE
Keller Williams Realty http://www.utopianhomes.com
ajkrumholz@yahoo.com
(703) 599-4755 - cell