The down payment first time home buyer question is a popular one. How much money will I need to put down on a house? The answer depends on the type of mortgage a borrower uses to purchase a home, but for an FHA loan right now the answer is 3.5%. Please note that there are new FHA policy changes will take effect in the spring or early summer. The changes have been created to manage risk and decrease the future rate of default.
In a nutshell:
1. New borrowers will now be required to have a 580 minimum score to qualify for the 3.5% down payment. New borrowers with less than a 580 score will be required to put down a minimum of 10%.
2.Upfront mortgage insurance premium increase of ½%. The shift will also include an increase in annual mortgage insurance.
3.Allowable seller concession will be reduced from 6% to a maximum of 3%. After a notice and comment period, this will go into effect in the early summer.
With a growing number of new FHA loans, the inventory of HUD homes for sale is also increasing. There are opportunities for first time buyers to acquire HUD homes during an initial offering period. During this time, only owner occupants can bid on the new HUD listings.
After an initial period, if no owner occupant bids are received, investors will be invited to make an offer and the status will change from owner occupant only to all bidders. For more information on Baltimore HUD, other foreclosures, and down payment first time home buyer counseling in Baltimore, contact us today.
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