In the past few years we have seen the demise of sub-prime lending and the end of 100%
financing. This has locked out a lot of buyers. We have also heard a lot about FHA loans and the benefits of this “in vogue” mortgage product, but FHA requires a minimum 3.5% down now and some hefty mortgage insurance, a tax in your monthly payment. We have also heard about the tightening in the industry, especially in the Freddie/ Fannie Conventional world.
There is a program that can help – It is:
* A Conventional loan with
* NO down payment,
* NO monthly Private Mortgage Insurance
* Up to 6% seller closing costs contribution allowed for all reasonable closing cost and prepaids
* Up to 100% Loan with NO hit to the rate for the zero down
* NOT a first time home buyer program- unrestricted
* Gift funds from anyone to close
* No reserves needed
* No seasoning requirement to sell- No 90 day hold rule
* Geographic and income restrictions do apply
If I told you also that this particular mortgage also has a unique feature that all reasonable closing cost and prepaids can be rolled into the mortgage without the seller actually “paying” the cost (as long as the house appraises for the increased loan amount)? Think about how useful that would be in negotiations of contracts, especially when your buyer is purchasing a foreclosed property.
There IS a Conventional loan that has these great options and it is the USDA Guaranteed Rural Housing loan (yes, USDA like the beef). It is area-specific and income-limited, so it is not for everyone, but for certain people it is the perfect solution and works really well.