FHA Minimum Down Payment Increase, As it Applies to 203K

Mortgage and Lending with On Q Financial NMLS #151088

Beginning Jan 1st, 2009, the minimum down payment on all FHA purchase transactions will increase from 3% to 3.5%.  As the mortgagee letter states, "limit the total FHA-insured first mortgage to 100 percent of the appraised value, and require the inclusion of the upfront mortgage insurance premium (UFMIP) within that limit."  This does not mean that FHA is 100% financing, but rather the 96.5% LTV + the Upfront MIP (normally 1.75%) must be less than 100%.  Since 203K will go to 110% of the appraised value, the 100% limit does not apply.

Specialty products with higher LTVs: Section 203(k), Section 203(h) for disaster victims, and FHA's Energy Efficient Mortgage (EEM) programs are not affected by the LTV limit. All existing policy guidance regarding the rehabilitation program under Section 203(k),including streamlined (k), mortgage insurance for disaster victims, and the EEM programremain in effect.

The 6% limit on seller contributions toward closing costs/pre-paids remains unchanged.

HUD's $100 down REO program will continue.


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It is always advisable to consult with a knowledgeable lending professional when navigating today's turbulent mortgage and real estate marketplace.  I am committed, qualified and equipped to help you evaluate your options!




Also check out:


Conventional Financing Mortgage Program Overview/Updates


FHA Financing Mortgage Program Overview/Updates


Georgia Dream Down Payment Assistance Program Overview/Updates


USDA Financing Mortgage Program Updates  


Programs Include:


  • Conventional (Fannie Mae & Freddie Mac)

  • HomePath - #1 Volume Retail Lender

  • HomePath Renovation

  • FHA

  • FHA 203K Renovation Loans (Streamline or Consultant)

  • Georgia Dream Down Payment Assistance

  • Jumbo

  • USDA

  • VA

  • Conventional Condo Project Approvals

  • FHA DELRAP / HRAP Condo Project Approvals


    Rodney Mason is a Sr Loan Officer located in Atlanta, GA.  He is also 203K Renovation Loan and HomePath REO Property Specialist.  He can be reached at (404) 591-2453.

    Providing financing for all cities across Georgia including: Acworth, Albany, Alpharetta, Athens, Atlanta, Augusta, Austell, Avondale Estates, Blairsville, Bloomingdale, Blue Ridge, Bogart, Brunswick, Buckhead, Buford, Canton, Carrollton, Cartersville, Chatsworth, Clayton, College Park, Columbus, Commerce, Conyers, Covington, Cumming, Dahlonega,  Dacula, Dalton, Dawsonville, Decatur, Doraville, Douglasville, Duluth, Dunwoody, East Point, Fayetteville, Flowery Branch, Gainesville, Greensboro, Hampton,  Hapeville, Hinesville, Hiram, Jackson, Jefferson, Jonesboro, Kennesaw, Lagrange, Lawrenceville, Lilburn, Lithia Springs, Macon, Madison, Metter, Morganton, Morrow, Newnan, Norcross, Oakwood, Peachtree City, Pooler, Richmond Hill, Riverdale, Rome, Roswell, Sandy Springs, Savannah, Scottdale, Statesboro, Stockbridge, Stone Mountain, St Marys, Sugar Hill, Suwanee, Thomasville, Thunderbolt, Tucker, Tybee Island, Valdosta, Waleska, Warner Robins, Waycross, Wilmington Island, Winder, Woodstock, and many more.

    Providing financing for all cities across Alabama including: Alabama Port, Anniston, Athens, Auburn, Bessemer, Birmingham, Boaz, Bridgeport, Cedar Bluff, Chickasaw, Clayton, Coden, Dauphin Island, Decatur, Dothan, Eufaula, Fairfield, Fairhope, Florence, Foley, Forestdale, Fort Morgan, Fort Payne,Gasden, Grand Bay, Gulf Shores, Heron Bay, Homewood, Hoover, Jasper, Josephine, Madison, Meadowbrook, Midfield, Mobile, Mon Louis, New Hope, Orange Beach, Oxford, Oyster Bay, Phenix City, Prichard, Rainbow City, Saraland, Satsuma,
    Scottsboro, Selma, Troy, Theodore, Tillmans Corner, Trussville, Tuscaloosa, Vestavia Hills, Warrior and many more.


    Providing financing for all cities across Tennessee including: Athens, Brentwood, Bristol, Chattanooga, Clarksville, Cleveland, Cookeville, Dyersburg, Franklin, Gatlinburg, Greeneville, Johnson City, Kingsport, Knoxville, Maryville, Memphis, Morristown, Murfreesboro, Nashville, Newport, Oak Ridge, Pigeon Forge, Sevierville, and many more





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Janice Roosevelt
Keller Williams Brandywine Valley - West Chester, PA
OICP ABR, ePRO,Ecobroker

Rodney Here'sa questiom if a first time buyers buy duplexes than the FHA will use the rent of one unit to qualify your purchase if you live in the other unit. Is that true? And what exactly does that mean? Kinldy email jroosevelt@kw.com

Feb 24, 2009 10:19 PM #1
Rodney Mason
On Q Financial - Atlanta, GA
FHA 203(k) & HomeStyle Renovation-AL,FL,GA,TN

Yes, the projected rent from the appraiser's rent schedule will be used for the rental unit.  The rental income is then multiplied by the applicable vacancy factor.

If there is a non-occupant co-borrower, the LTV is limited to 75%.

Mar 05, 2009 06:41 AM #2
Garrett Feis


I don't know why more people don't use the 203k on multifamily properties.  Sure makes sense to me to have someone else pay the notes.

Sep 17, 2010 08:52 AM #3
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Rodney Mason

FHA 203(k) & HomeStyle Renovation-AL,FL,GA,TN
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