Yes, it is possible to get a 95% loan in Chicago. However, most PMI companies will not insure them. So, I would suggest going the FHA route. Rates are very comparable to a conventional loan also. Your MIP (Mortgage Insurance Premium) on an FHA would be less than what you would pay for PMI (Private Mortgage Insurance.) Most people think that FHA's are for people with derogatory credit histories but I've been closing many FHA loans for people with very high credit scores lately. Kathy Borucki

It should be. You should even be able to do FHA. This article will explain the fha process.

http://getprequalified.com/article_list_mortgage_fha_financing.php

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FHA is the way to go.

It sounds like people are saying that both conventional and FHA loans are possible (the former at 5%, the latter at 3%), but that the FHA is preferable. I was under the impression that FHA loans carried higher interest rates, but perhaps I was mistaken? If so, that's great news.

Thanks for the comments

Robert,

I agree with most of the comments here I think FHA would be the way to go. You can put less down and still get a great rate, Contact your local mortgage banker then shop rates and closing costs.

Brent Bester
Mortgage Professional
614-622-8916
bbester@usavingsbank.com

You are right. Lenders are becoming more and more stringent, but based on the info. you have provided, conventional financing with five percent down for the loan amount you are seeking should be attainable for you.

Well, I can't speak for the Chicago area but 95% LTV is still very much an option in Western NY. However, I just had a client who was planning on going conventional 30-yr fixed with 5 % down change to FHA at the last minute. Why? Because we figured out that they could put down 3% with FHA and use the additional 2% that they were going to put down to buy down their rate. Since they plan on staying in the home for a long time, they are saving a lot of money going this route.

Robert,

Shel-lee is right on. FHA loans are a great product and, with the current and prospective changes in conventional loan guidelines, will grow more attractive in the future. I think that there is some stigma that FHA is a "low income" loan program. That may have been the case previously, but it isn't anymore.

You may also want to check with local banks in the Chicago area to see what type of "community initative", portfolio loan programs they offer. I know that Park National Bank has a great program they call Community Gold that is 2% down. I know that other banks offer these, but as I'm happy with the Park program and their loan officer, I haven't had reason to go exploring further.

Finally, they are great programs that are targeted at a segment of the population: USDA Rural Loans (good in the collar counties), military service, first responders, etc.

Contact me thru my profile if you want more info.

Thanks,
Tim

Robert: Why would you NOT want to go with an FHA loan? These are 30 year fixed and quite often have lower interest rates than conventional financing. Additionally, they only require 3% down and if you are a first time homebuyer and do not exceed certain income limits, you might qualify for a program to finance even that 3%. The FHA appraisal includes an inspection of material defects and FHA requires the seller to perform the repairs before funding the loan. All these are positives. The only draw back to FHA is that you must provide full income documentation, which means most self employed people have a hard time qualifying. I suggest that you speak with a qualified loan rep who knows the FHA v conventional programs in your area (as you might be able to tell I am in California) and have them advise you on your best options.

Evrey lender is different and the rules change all the time on these high loan to value loans. Last week my lender said they were offering this program. Give Todd Theesfeld a call at National City Mortgage at 312-384-8280 or email him at todd.theesfeld@ncmc.com.