FHA Cash Reserves Requirement
Did you know that FHA doesn't have a requirement for cash reserves?
That's right.... Not require! You can literally spend your last dollar at the closing table.... although that is not recommended.
The perception is out there that FHA requires 2 or more months of PITI(principle+interest+taxes+insurance) left over after closing. This is just not the case.
Now, does it help to have some cash reserves after closing? Sure it does!! The automated underwriting engine that scores a loan application and borrower credit will consider reserves as one of the many compensating factors in deciding on approval. A big fat 401K or savings account or stock portfolio makes a borrower a much stronger candidate for approval as they seem less risk of foreclosure.
So, if you have some money that cannot be documented or used for cash reserves.... don't sweat it!! If you are otherwise a strong borrower, you can buy today!!
I write about Texas Home Loans , live in the Dallas, TX area and lend across the entire Great State of Texas!!
Your Texas FHA Expert and Dallas Mortgage Expert.