Buy a Home for 3.5% Down
You are here : Home > Buy a Home for 3.5% Down
FHA loans have been helping people become homeowners since 1934. How does FHA do it? The Federal Housing Administration (FHA) – which is part of HUD – insures the loan, so your lender can offer you a better deal.
1) Low down payments
2) Low closing costs
3) Easy credit qualifying
What does FHA have for you?
Buying your first home?
FHA might be just what you need. Your down payment can be as low as 3.5% of the purchase price, and most of your closing costs and fees can be included in the loan. Available on 1-4 unit properties.
Want a fixer-upper?
FHA has a loan that allows you to buy a home, fix it up, and include all the costs in one loan. Or, if you own a home that you want to re-model or repair, you can refinance what you owe and add the cost of repairs – all in one loan.
Financial help for seniors
Are you 62 or older? Do you live in your home? Do you own it outright or have a low loan balance? If you can answer “yes” to all of these questions, then the FHA Reverse Mortgage might be right for you. It lets you convert a portion of your equity into cash.
Want to make your home more energy efficient?
You can include the costs of energy improvements into an FHA Energy-Efficient Mortgage.
How about manufactured housing and mobile homes?
Yes, FHA has financing for mobile homes and factory-built housing. We have two loan products – one for those who own the land that the home is on and another for mobile homes that are – or will be – located in mobile home parks.
Ask an FHA lender to tell you more about FHA loan products.
Find an FHA lender
Need help with your down payment? State and local governments offer programs that can help.
CHFA -CO Housing & Finance Authority (CLICK HERE).
HUD’s $100 Down Payment Program for FHA Financing!
Large down payment requirements have made homeownership a challenge for many otherwise qualified home buyers. HUD’s latest announcement includes a $100 down payment on HUD homes with FHA financing where offers are at or above current list price. Any offers exceeding appraised value require buyer to provide additional funds at closing. (Please check with your Mortgage Lender for full details).
$100 Down Program is Availabale in: Arkansas, Colorado, Kansas, Louisiana, Missouri, New Mexico, Oklahoma, Texas and Utah.
Incentives apply to eligible homes located within the HUD Denver Home Ownership Center. The program is effective immediately starting October 20, 2011 and will extend through October of 2012.
How does the $100 Down Program Work?
1) Borrower must qualify for an FHA loan (203B, 203B with escrow or 203K) in order to qualify for the program. This is NOT for investors, it’s only for owner occupants.
2) To qualify for the $100 down, the offer must be for the full list price or higher. If the bid happens to be higher than the HUD appraised value, the buyer must put down the difference in cash, plus the $100.
There are some closing costs that are automatically paid by HUD without having to ask for closing cost assistance. These include:
1) Condo or HOA transfer fees and any special assesments.
2) Tax prorations.
3) Cost to provide condo documents to buyer.
4) Repair escrow fee of up to $200 if applicable.
5) Settlement or Closing Agent Fee.
6) Recording fees for the deed.
HUD will also pay up to 3% of closing costs that are “reasonable and customary” IF this is requested in the contract on Line 5 and approved by HUD. If the amount in Line 5 happens to exceed the amount of closing costs, HUD WILL NOT REIMBURSE THE DIFFERENCE. The items that can typcially be included in the 3% and are considered “reasonable and customary” by HUD include:
a) Appraisal fee IF an additional appraisal is required to determine the “after rehab” value for a 203K rehab loan.
b) Credit report fee.
c) Flood Certification fee.
d) Home Inspection. Invoice must be provided.
e) Homeowner’s warranty.
f) Loan discount points with a certification from the lender that this cost was actually used to buy down the rate.
g) Loan origination fee of up to 1%. Can be 1.5% on 203K loans.
h) Pre-paid and escrow items for OWNER OCCUPIED PURCHASES ONLY.
i) Recording and/or transfer taxes and fees.
j) Survey (if required by the lender.)
k) Title Insurance Coverage for owner.
l) Title Insurance Coverage for lender.
**NOTE** – Some lenders do not require a survey or title insurance coverage on HUD homes.
Also, keep in mind that the actual money needed at closing will almost always be more than just $100 because even if HUD agrees to pay 3% towards closing costs, that’s usually not enough to pay for them all. So the difference, minus the earnest money paid, will be due at closing.
Be sure to provide an email address and/or a phone number.
If you are sending us a file, please ZIP your file to ensure safe delivery.