- Can be used to buy primary residences, secondary residences and investment property.
- For lower risk buyers with better credit, assets and work history.
- Typically 5%, 10% and 20% down payments, with Mortgage Insurance required on anything less than 20% down.
- Sellers Assists of up to 3% (5% down) or 6% (10% down or more), or the maximum of closing costs, whichever is lower, is allowed on these loans.
- Ask the Lender for Conventional Renovation loan options, if needed.
- Loans over $548,000 as of 2021 are called Jumbo loans and have a different set of requirements.
- The Buyer must live in the home.
- For higher risk buyers, the Federal Housing Administration is insuring the Lenders in case of default in order to promote home ownership.
- Only 3.5% down is required.
- Sellers Assist of up to 6%, or the maximum of closing costs, whichever is lower, is available on this loan.
- FHA203(k) Renovation Loan available
- Available as a reward to our military service members.
- Rather than FHA insuring these loans, the Veterans Administration is insuring these loans with a one time, up-front Mortgage Insurance Premium that is financed with the loan.
- 0% down and no monthly Mortgage Insurance.
- Seller Assist of 4% or more, or the maximum of closing costs, whichever is lower, is available on this loan.
- PHFA (only in Pennsylvania)
- This is Pennsylvania’s version of the FHA loan.
- These loans are insured by the PA Housing & Financed Administration.
- 3% down and up to 6% Seller Assist, or the maximum of closing costs, whichever is lower, is available on this loan.
- The rate is usually a percentage point higher than the FHA loan but has no monthly mortgage insurance. Usually is cheaper for the Borrower on a monthly basis.
My formula for the “perfect” Sellers Assist (where 6% is allowed by the Lender/Loan Product)
Take the Estimated Cash Needed to Purchase and subtract $1800 = Your Perfect Seller Assist
Confirm this amount is 6% or less than the Purchase Price.