FHA government insured mortgage loans can offer more flexible underwriting guidelines for borrowers who have less than perfect credit. However, there are mortgage loan amount limitations for each county in the United States. Please check limits for FHA mortgage loans here. These loans requires a low down payment but it can be a 100% gift or you can use grant or down payment assistance programs. Also, the seller can pay up to 6% of the purchase price in closing costs. Finally, it is one of the few loan programs left which allows an underwriter to take into account extenuating circumstances such as job loss, long-term illness, and death in the family as legitimate reasons for credit issues in the past and they can manually approve a file on a case-by-case basis. See official Federal Housing Administration website for more detailed FHA loan information.
Let's take a look at a few FHA Loans:
A first time home buyer can purchase a home from their parents and use the equity in the home for down payment and closing costs. For example, your parent's home is worth $150,000 but they are willing to sell it to you for $140,000. You can use the $10,000 difference or equity to cover down payment and closing costs. We should point out that if the home appraises for less than the agreed upon selling price then you will need to come up with some cash for closing.
If you are a parent, FHA has made it easier for you to help your son or daughter purchase a new home by becoming a co-signer on the loan. Instead of paying rent on an apartment, your son or daughter may be eligible to purchase an FHA eligible property (single family residence, townhome, or condo, etc.) with your assistance. Furthermore, your son or daughter does not need funds in his or her bank account for the down payment. The parents, however, must have sufficient credit, income, and funds to pay for the closing costs and down payment but they do not have to live in the property. This program is available to borrowers, other than parents, related by blood (siblings, aunts and uncles, etc..), or for unrelated individuals that can document evidence of a family-type longstanding and substantial relationship not arising out of the loan transaction. Finally, the son or daughter must be able to qualify for the mortgage payment and meet other qualifying guidelines to be eligible for for this program.
You can purchase a HUD owned property or FHA Foreclosure with lower down payment than standard FHA program and the seller can pay for some or all of the closing costs.Eligible states include: Alabama, Florida, Georgia, Illinois, Indiana, Kentucky, Mississippi, North Carolina, South Carolina, Tennessee.Single family, 2 to 4 mulit-unit, PUD, and HUD or FHA approved condo projects, and homes located in disaster areas are eligible. Find Foreclosures Now!
Please contact us at 847-305-3162 or email Dream@FirstHomeBuyers.net if you have questions or want more details on these great programs. Please apply for FHA mortgage if you would like to get pre-approved today for this program.