Nashville Mortgage News- LOW to NO Down Options- FHA LoansBy
Nashville Mortgage News- LOW to NO Down Options- FHA Loans
FHA loans are the most popular program for first time buyer, but fortunately you don’t have to be a first-timer to qualify. Unlike loan programs like USDA Rural Development loans, there are no geographical limitations, so you can buy anywhere with FHA. But, FHA is not a 100% financing loan program. You’ll need the required 3.5% down coming from one of the following sources: your own money, gift funds from a close family member, a gift/grant from a qualifying non-profit or government entity, or even a second mortgage set up by a non-profit agency. For a Nashville mortgage or middle-TN mortgage, The Housing Fund, Inc. (THF) is a non-profit organization which has a program that can help low to moderate income earners with down payment/closing cost assistance by providing a second mortgage up to $7000 (amount of loan is dependent on income). Homebuyer education is required, and you have to contribute out of your own funds at least 1% of the sales price towards closing costs or down payment. In essence, you could potentially purchase a $125,000 home with as little as $1250 out of pocket, utilizing both FHA and a THF second mortgage. FHA first mortgage loans have rates that generally rival the best conventional rates, particulary the 3o fixed loans. Virtually all FHA lenders require a 620 credit score now.
The next installment of Nashville Mortgage News will discuss the THDA program…stay tuned!