Is it possible to get a FHA home loan with just 1% as down payment?

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I have been getting emails from another mortgage company saying they can do 1% down FHA. It's a 97% 1st and a 2% "lender gift."

Does anyone know about these and if any FHA lenders are doing them?
 
Seems a little odd to me that the lender can give a gift to the buyer!
 
Posted on: 05/24/2013
asked 4 years ago by anonymous
edited 4 years ago by anonymous

3 Answers

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A FHA lender cannot give a gift if pricing is there the broker can give premium pricing credit for closing cost. There is a $100 down FHA program. Also while DAP's have gone away if the borrower buying in low to moderate area and there are city/county or state grant programs they could use this is well. If a lender is giving money down for a downpayment they must be putting a second lien on the loan.

Under FHA guidelines you can do 97% LTV w/ a 6% seller's concession, and the 3% buyers contribution can be a gift from family (not the lender or seller).

I have noticed that some sellers and lenders are joining together with non-profits to create pools of buyer gift funds that don't have any direct relation to the individual house being sold. They set up the fund in advance which then gives the gift whenever houses are bought in particular subdivisions. At the closing there is just a gift that doesn't have to be repaid out of the closing funds.
answered 4 years ago by anonymous
edited 4 years ago by anonymous
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There are several states (Virginia is one) that has state bond programs that are used in conjunction w/ FHA loan programs. Many FHA lenders have what they call a FHA/VHDA loan that will go to 102% (97% first, 5% second for closing and down payment). The second meets HUDs criteria. Seller can pay points. It also allows for a family of 2 to have an income of 100K or so, and a max sales price of 408K. The only cash requirement is the buyers have 1% - they don't have to spend it, they just have to have it. UW is FHA driven. First time buyers (3 yrs).

 
Many mortgage brokers avoid state bond programs because income is limited and the loans can be labor intensive (especially if you have never done one). I would look into your state's housing programs and at least know what you are up against if you can't/won't do them. I use to avoid them like the plague, now I am quite well versed in them. If you would have told me that this time last year, I would have said you were crazy.
answered 4 years ago by anonymous
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A Veteran is usually eligible for 100% financing with FHA's programs, and most Veterans don't know it (and most FHA loan officers don't know it either). Many Veterans who may not be eligibile for a VA Guaranteed Home Loan will probably be eligible for a FHA/VA home loan, entitling the Vet to a 100% FHA home loan. If you're doing a lot of FHA, it's worth it to ask the homeowners if they served any time in the Armed Forces.

ML 2004-24: Federal Housing Administration (FHA) Mortgages to United States Veterans (06/18/04) is where you find the veterans deal under FHA.

If the property and borrower are eligible, go USDA, this will be a better program than FHA and once the new down payment guidelines for FHA come out. Also, the USDA will also be coming out with a streamline refinance program. There is no seperate approval or audited financial requirement to be able to do USDA financing
answered 4 years ago by anonymous

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