Is there an FHA loan that does not require a %3 downpayment?

Asked by Roger, 75961 Fri Jan 15, 2010

If not can we get inventive and place an offer on a house requiring the seller to pay the downpayment and closing costs? For instance on a house that costs $150,000 we can offer $155,000 and require them to pay the downpayment/closing costs?

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15
Skip Williams, , Jackson, MS
Thu Aug 4, 2016
FHA guidelines require a down payment to be made by the buyer. There are instances where you are able to be gifted the down payment.

The gift letter must be verified and signed by the person who give you the down payment. This person's bank account will be probed for seasoning (Been in this account for 3 or more month) and the amount in the account.

You would be required to pay the closing cost of this mortgage loan.

There can be no side deal that the buyer would repay this gift. This is called fraud.

If you are in a rural area there is another federal loan available for certain areas called a USDA mortgage loan. This loan is like a VA mortgage loan and require no down payment. You would be required to pay closing cost. Normally these mortgage loans are approved for a certain rural area.

You would have to check with a local mortgage lender as to if there is an area where you reside that a USDA mortgage loan would be approved.

I hope this has been of some benefit to you, good luck.

"FIGHT ON"
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Tommy Burris, Mortgage Broker Or Lender, Baton Rouge, LA
Sun Jan 17, 2010
HUD $100 down payment deal is there.... But they will likely not pay much of the closing costs.
Almost always have an appraisal AT LIST PRICE so if you go over that with offer you will have to cover difference.

Talk to your realtor.

If you do not have either 3.5% down or closing costs.... I think it would be wise to wait. Homes require maintenance.... And even if you do stuff yourself you will be buying parts and things from home depot.

Also.... if you don't have the money in the bank to buy a home.... the automated underwriting software will likely deny anyway.
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Richard Leci…, , Tucson, AZ
Sun Jan 17, 2010
This is the web page for HUD homes. Normally an FHA loan needs 3-1/2% down. I would contact an agent who has HUD experience. They are not always a piece of cake to get done. Good luck
http://www.mcbreo.com/
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Roger, Home Buyer, 75961
Sun Jan 17, 2010
If only I could have found one of those HUD forclosed homes in the area. That's some sweet deals.
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Roger, Home Buyer, 75961
Fri Jan 15, 2010
How would I check FHA HUD forclosures in my area? How many applications should I submit to different lenders in order to find the best one for me?
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Sam Thompson, Mortgage Broker Or Lender, Alpharetta, GA
Fri Jan 15, 2010
One idea I will add to the Rural Housing loan program idea and the other comments already offered is to check and see what FHA is offering on their foreclosures in your area....In Georgia and several other states, they are still offering the $100 down program and will pay up to 3% towards closing costs..... Best of luck.
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Alisha Chen, , Irvine, CA
Fri Jan 15, 2010
I would be very uncomfortable with this...remember the reason we are in this economic crisis is because the lenders were way too easy on approving loans that buyers really can't afford. As a buyer, I understand it would benefit, but for our economy as a whole, programs letting buyers buy with so little were the starting point of all the financial crisis, real estate prices went to high too quickly, causing homeowners not able to continue to pay their mortgage, loss of jobs, etc.

However, Fannie and Freddie have programs out there that you can buy a home with as little as $500 if you qualify. Check out their website.
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Dallas Texas, Agent, Dallas, TN
Fri Jan 15, 2010
Lender wants you place "skin into the game" have some ownership in property.

W/o down payment of 3.5% or more you won't be able to qualify.

Keep in mind you receive annual tax benefits, plus $8K tax credit

Can you borrow the money from family member as a gift?

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0 votes
Bruce Lynn, Agent, Coppell, TX
Fri Jan 15, 2010
Roger,

This is really a thing of the past....it is one of the reasons that got us to this financial crisis.
Most loans want you to have some skin in the game now....ie down payment.
Appraisals are also much tougher and raising the purchase price now is rare to cover the difference.
It can happen, but not as common as this technique was a few years ago.

USDA still has a 100% LTV program that works in certain rural areas....so it just depends on where you want to live.
Web Reference:  http://www.teamlynn.com
0 votes
Steve Fergus…, , Austin, TX
Fri Jan 15, 2010
Roger

USDA loans allow you to purchase a home with 100% financing and no mortgage insurance. Rates are good and I consider USDA to be one of the better programs available for first time home buyers.

FHA is a great loan program but requires the 3.5% down payment or $100 down on a HUD foreclosure that qualifies for the program. FHA rates are normally slightly better than USDA but USDA does not require the down payment.

You can't go wrong with either program but if down payment is the key to your home buying success USDA is the way to go. Hope this helps.
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, ,
Fri Jan 15, 2010
Reger, can you qualify for a VA loan?
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Roger, Home Buyer, 75961
Fri Jan 15, 2010
Would a USDA loan be better for us as long as we find an area that qualifies? Are there advantages to FHA or USDA loans?
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Tommy Xintar…, Mortgage Broker Or Lender, Dallas, TX
Fri Jan 15, 2010
Hi Roger, the seller cannot pay for your 3.5% down payment unfortunately. With FHA, you have to have a statutory investment of that amount (required). Your down payment can however come in the form of a gift from a family member.

The seller CAN pay for up to 6% of your closing costs though.

I hope this helps.
0 votes
Barbara Q., , Bergen County, NJ
Fri Jan 15, 2010
Roger-FHA Financing - The Seller cannot pay your down payment (3.5%) but can pay your closing costs and discount points (up to 6%).

You can get a Gift for the down payment from a family member, close friend, employer or labor union. An original gift letter is required. The letter must state there is no repayment required and state the donor is not tied to the loan transaction.

Tax Credit $8,000 for FTHBs... sure you can be "inventive." ; )
Web Reference:  http://www.321advantage.com
0 votes
Pat & Steve…, Agent, Westlake, OH
Fri Jan 15, 2010
You definitely need to talk to a lender about your questions. And, have your lender pre-approve a loan for you, so you know where you stand. A seller will request a loan pre-approval letter from you when you submit a purchase agreement. You also need to hire a Buyer's Agent, who protects you interests, but the comission is paid by the Seller. Regarding an FHA Loan, currently you need a 3.5% with seasoned funds (the lender will give you a full description). I have heard the deposit for FHA loans is going up to 5%, so the sooner you talk to a lender, the better off you will be. You can, also, put in a purchase agreement that the Seller will pay up to 6% of your costs, but, again, you need to talk to a lender.
(I am an attorney & real estate agent licensed only in OH, so my answers are only my personal opinions.)
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