Home Buying in 90033>Question Details

Amanda, Home Buyer in Los Angeles, CA

Will the downpayment for FHA be out of pocket from the buyer or can it be included in the loan?

Asked by Amanda, Los Angeles, CA Tue May 19, 2009

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Hi Amanda, Erin's correct on the two appraisals; however, if you put 5% down you can avoid the 2nd appraisal. If you ask for the max of 6%, based on true market value, you are still ahead of the game, so to speak. The Appraiser-identified health & safety issues do need to be corrected, but you probably want this anyway. A new trend I'm seeing from REOs is specifically stating "No FHA Financing" on listings because of unknown health & safety issues.

Best, Steve
0 votes Thank Flag Link Sat Jun 27, 2009
There are issues you need to be aware of. If you pad the price to compensate for closing costs, you can very well have a serious issue with the appraisal.

Appraisals, and the issues surrounding a 'declining market' are a major roadblock for FHA deals.

Also be aware that because of your low down payment, you will be required to have 2 appraisals. The appraisers are going to be also citing health and safety violations per the FHA guidelines, so with this low down, you are going to be having 2 appraisers possibly citing completely different violations that will need to be cured to fund your loan.
0 votes Thank Flag Link Sat Jun 27, 2009
one thing that is possible is to offer 3.5% over the asking price and then ask the seller for 6% in concessions.
0 votes Thank Flag Link Sat Jun 27, 2009
Hi Amanda, FHA loans REQUIRE that the 3.5% down payment comes from the buyer's own proceeds (this can be gift money from a relative.)

Best, Steve
0 votes Thank Flag Link Tue May 19, 2009
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