Michigan, Home Buyer in Ferndale, MI

$100 down payment fha loan?

Asked by Michigan, Ferndale, MI Wed May 6, 2009

I am purchasing a hud home. On the agreement it states that I am eligible for the $100 down paymentincentive though I didn't offer full price. Does anyone know anything about this incentive? Does this mean I don't have to put the intial 3.5% down that is usually required for an FHA loan?

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Pamelajain, Home Buyer, Dallas, TX
Thu Jul 23, 2015
A HUD home is a 1-to-4 unit residential property acquired by HUD as a result of a foreclosure action on an FHA-insured mortgage,"" says the HUD website. HUD becomes the property owner and offers it for sale to recover the loss on the foreclosure claim. Additionally, the borrower must purchase the home through the regional HUD office, which must be offering the $100 down only incentive.

Additionally, buyers may pay more than the home is worth if there is a bidding war for the home, says Bakke. If the bidding price exceeds the home's value, the buyer will have to come up with the difference between the sale price and HUD's appraised value on their own, he says. Bakke adds that the FHA arranges for an appraisal, so homebuyers don't need to get one on their own.

So if the [HUD] appraised value of the property is $100,000, but the winning bid is $115,000, then the buyer must bring the $100 plus the $15,000.

Web Reference: http://fhamortgageinfo.com/
3 votes
Luke Allison, , Asheville, NC
Wed May 6, 2009
Exactly. Every HUD-owned home qualifies for an FHA loan which only requires a $100 hard investment from a buyer. Not to mention that HUD-approved repairs can be rolled into the purchase.

Other than that, the loan is no different that any other FHA loan so if you are buying a home that is eligible for the $100 program, take it and run with it!

Luke Allison
Bank of America Home Loans
1 vote
Lori Lewis, Mortgage Broker Or Lender, Bethlehem, PA
Wed May 6, 2009
Web Reference:  http://www.myallied.net
1 vote
Hayward Litt…, Agent, Farmington Hills, MI
Wed May 6, 2009
I have a client that just won a bid on a HUD home (in Michigan). It is possible to do the $100 downpayment, but the decision is really up to the lender who is providing your financing.

Based on what I was told, you may do the $100 downpayment, but may have a higher interest rate. This is a good conversation to have with your loan officer to understand your options.

Glad to see you're buying in Michigan!!
1 vote
Pat Anderson, , Livonia, MI
Wed May 11, 2011
.HUD does have a $100.00 down payment program for their homes. This program changes from time to time and is state specific. Unfortunately, HUD does not offer this financing in Michigan today. We did have this program available for a few years but it was cancelled in Michigan about two years ago. The down payment required in Michigan today is 3.5% for any home - included HUD owned properties. Use this link to see where this program is offered today:
0 votes
Michigan, Home Buyer, Ferndale, MI
Thu May 7, 2009
Thanks for the answers everyone. I talked to my broker and was told my interest rate would go up if I chose to use the $100 down option. Unfortunately, while I'll save money up front I don't know if it's worth it.
0 votes
Lori Lewis, Mortgage Broker Or Lender, Bethlehem, PA
Wed May 6, 2009
We just had a training and to my understanding is this is true, but I am not sure about Michigan. I will try and dig up more info
0 votes
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