We all know that FHA is going to require 3.5% downpayment in a few weeks (January 1) - but did you know that in some circumstances they also require the borrower to have two months of cash reserves?

If a borrower is applying for FHA financing and is relying on a NTMCR, (nontraditional credit), FHA Commissioner Brian D. Montgomery writes:

"Borrowers should have two months of cash reserves following mortgage loan settlement from their own funds (no cash gifts from any source should be counted in the cash reserves for borrowers in this catagory)."

As a general rule, if you're applying for an FHA loan and you don't have a ton of credit references, I would make certain that your loan officer is aware of this.  The good news is that as a First Time Homebuyer you might qualify for an Interest Free $7500 tax credit from Uncle Sam!  It's a GREAT time to buy real estate - this is just one of those "little" changes that you want to check out up front!

If you are considering a home purchase in Cary, or buying real estate in Raleigh, please call Steve and Eleanor Thorne,First Financial Services, 919-851-3031