12 SECRET FHA DOWN PAYMENT SOURCES

With the Housing bill that just passed it eliminates down payment assistance that comes from the seller. Meaning that you'll have to come up with your 3% down payment, but here are some ways to get the down payment so your acentually back to 100% financing. Used in combination with the HR 3221 $7,500.00 tax credit you can essentially continue to qualify for $0 down FHA! 

Family Member Lending.  Family members (defined below) may help with the costs of acquiring a home in the form of a gift or a loan.  All such gifts must also meet the requirements of paragraph 2-10(C).  FHA permits family member to lend on a secured or unsecured basis, up to 100 percent of the homebuyer's required cash investment.  This lending may include the down payment, closing costs, prepaid expenses and discount points.  If the money lent by the family member is secured against the subject property, whether borrowed from an acceptable source or from the family member's own savings, only the family member provider(s) may be the note holder.  FHA will not approve any form of securitization of the note that results in any entity other than the family member being the note holder, whether at loan settlement or at any time during the mortgage life cycle.
Further, if the funds that are lent by the family member are borrowed from an acceptable source, the home buyer may not be a co-obligor on that note (e.g., the son and daughter-in-law may not be co-obligors on the note used to secure money borrowed by the parents that in turn was lent for the down payment). 
 
Other Organizations and Private Individuals.  Other organizations and private individuals may provide secondary financing under the following conditions:
The combined amount of the first and second mortgages do not exceed the applicable LTV ratio and the maximum mortgage limit for the area. 
Collateralized Loans.  Funds can be borrowed for the total required investment as long as satisfactory evidence is provided that the funds are fully secured by investment accounts or real property.  Such assets may include 401k, IRA, stocks, bonds, real estate (other than the property being purchased), etc.  We can also use funds that have been borrowed against collateralized assets such as a car, boat, etc.
 
Sale of Personal Property.  If the borrower intends to sell personal property items (cars, recreational vehicles, stamps, coins, baseball card collections, etc.) to obtain funds required for closing, the borrower must provide a satisfactory estimate of their worth, in addition to conclusive evidence the items have been sold. 
 
Gift Funds.  An outright gift of the cash investment is acceptable if the donor is the borrower’s relative, the borrower's employer or labor union, a charitable organization, a governmental agency or public entity that has a program to provide homeownership assistance to low- and moderate-income families or first-time homebuyer's, or a close friend with a clearly defined and documented interest in the borrower.  The gift donor may not be a person or entity with an interest in the sale of the property, such as the seller, real estate agent or broker, builder, or any entity associated with them.
 
Trade Equity.  The borrower may agree to trade his or her real property to the seller as part of the cash investment.  The amount of the borrower's equity contribution is determined by subtracting all liens against the property being traded (along with any real estate commission) from the lesser of that properties appraised value or sales/trade price.  Please be aware that there are additional industry restrictions to this provision- contact us for more information!
 
Employer Assistance Plans.  If the employer, to attract or retain valuable employees, pays the employee's closing costs, mortgage insurance premium, or any portion of the cash investment, this payment is considered employee compensation and no adjustment to the maximum mortgage amount is required.  If the employer provides this benefit after loan settlement, the borrower must provide evidence of sufficient cash for closing.  A salary advance, however, cannot be considered as assets to close since it represents an unsecured loan.
 
Cash Saved At Home.  Borrowers who have saved cash at home and are able to demonstrate adequately the ability to do so are permitted to have this money included as an acceptable source of funds to close the mortgage.  To include such funds in assessing the homebuyer's cash assets for closing, the money must be verified–whether deposited in a financial institution or held by the escrow/title company–and the borrower must provide satisfactory evidence of the ability to accumulate such savings.  Please be aware that there are additional industry restrictions to this provision- contact us for more information!
 
Rent Credit.  The cumulative amount of the rental payments that exceed the appraiser's estimate of fair market rent may be considered accumulation of the borrower's cash investment.  Both the rent-with-option-to-purchase agreement and the appraiser's estimate of market rent must be included in the endorsement package.
 
Sweat Equity.  Labor performed or materials furnished by the borrower before closing, on the property being purchased, may be considered as the equivalent of a cash investment, to the extent of the estimated cost of the work or materials.  (Sweat equity may be "gifted" subject to the gift requirements and additional requirements).
 
Commission from Sale.  If the borrower is a licensed real estate agent entitled to a real estate commission from the sale of the property being purchased, that amount may be used for the cash investment with no adjustment to the maximum mortgage required.  A family member entitled to the commission also may provide gift funds to the home buyer.
 
Borrowers 60 Years of Age or Older.  Borrowers 60 years of age or older may borrow the required cash investment for purchasing a principal residence, provided:
The donor or lender is a relative of the borrower, a close friend with clearly defined interest in the borrower, the borrower's employer, or an institution established for humanitarian or welfare purposes. 
The donor or lender’s interest is not solely in the sale of the property, such as a builder or seller, or any person or organization associated with builders or sellers.
The principal amount of the insured mortgage loan, plus the note or other evidence of indebtedness in connection with the property, may not exceed 100 percent of the value, plus prepaid expenses.
The note or other evidence of indebtedness may not bear an interest rate exceeding the interest rate of the insured mortgage.

There are also the options of rural housing which you can borrow up to 103% and Utah housing which can also borrow up to 103% of loan to value.

 Contact me today to discuss your options.