FHA Mortgages require a lower down payment than conventional loans (which can require as much as 20% down), but even so, many people have trouble coming up with enough money. The FHA loan rules require a minimum down payment of 3.5% for new purchase loans, and most of the closing costs and fees can be included in the loan, but a lot of this will depend on the individual requirements of participating FHA lenders.
Down Payment Assistance
The FHA does allow home buyers to borrow money for their down payment, but it comes with a couple stipulations. The loan must come from a third party that does not have a financial interest in the loan transaction. It must also be secured by real property instead of a cash advance or signature loan.
Down payment assistance programs were created to help potential homeowners with the down payment and closing costs that the FHA requires. The FHA does not have any direct grant programs to assist borrowers with these costs, but they do provide funding to state and local governments so they can run their own programs.
In other words, there are programs out there that can assist you with your purchase, and while they may be different from area to area, we can help you find the one that works for you. The FHA requirements for a down payment may be less than other loan programs, but if you still require assistance, there are some options available to you. Contact us today to learn more about your alternatives.