As discussed in earlier blogs, FHA loans are becoming more prominent with regards to home financing. The newest figures have around 20% of all closed loans in the 3rd quarter of 2008 being government loans; FHA, VA, USDA. That number figures to rise to 25% or 1 in 4 loans closing by the beginning of 2009 being a government loan.
One of the true benefits of a government type loan is the no to low down payment; VA - no down payment required, USDA - no down payment required and FHA - 3% down payment required (3.5% as of January 1, 2009).
In keeping with this theme, there is another low down payment program offered through FHA in purchasing a HUD home. A HUD home is a 1 to 4 unit residential property that HUD has acquired after an FHA mortgage is foreclosed on. HUD now owns the home and in turn offers it for sale to recover any losses after paying off the bank/lender.
Any buyer purchasing a HUD home with FHA financing is eligible for the $100 down program.
Typical FHA guidelines are in play, the property must be their primary residence, they must be able to prove income, employment and assets, have sufficient credit, etc. HUD does not require the borrower to use FHA financing to purchase a HUD home BUT one way to capitalize on the $100 down program is through FHA financing.
Please make sure you familiarize yourself with a particular bank/lender that not only specializes in FHA financing but one that also utilizes this specific program.
Kotar Associates
(954) 734-3504
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