Before we describe how to get a no money down FHA loan, we will give you the basic details, benefits and requirements for an FHA loan.<\/span><\/p>\n FHA Lenders who are federally approved to originate FHA loans will follow the guidelines set but the government agency (FHA – Federal Housing Administration). These guidelines are the same no matter which lender you use. <\/span><\/p>\n The program is designed to help people to own a home while making sure they have the ability to repay the loan. Lenders are protected from foreclosure by a mortgage insurance premium (MIP) that is paid by the borrowers and is explained below.<\/span><\/p>\n FHA Mortgage Benefits Other FHA Loan Requirements<\/strong><\/span><\/p>\n All FHA loans require a mortgage insurance premium.<\/span><\/p>\n What is the FHA Mortgage Insurance (MIP)?<\/strong><\/span><\/p>\n The FHA mortgage insurance premiums (MIP) provide lenders with protection against any future losses in the event that a borrower defaults on the loan. The lenders are protected because the FHA will cover the FHA lenders\u2019 losses in the event of a homeowner\u2019s default. Loans must meet the requirements referenced above (established by the FHA) to qualify for insurance.<\/span><\/p>\n If you follow some or all of the steps below, you will be able to finance the purchase of the home without using any of your own money. That being said, you may need to show that you have some funds for qualification purposes but in the end your goal is not to use it. Check with one of our lenders for more details.<\/span><\/p>\n 1.Gift Funds For<\/span> Your FHA Down Payment<\/strong><\/p>\n FHA loans require a 3.5% down payment<\/span><\/strong><\/a>. However, the good news is that you can get that gifted to you by someone else. There are strict guidelines as to where or who these funds can come from. The approved sources are as follows:<\/span><\/p>\n It is important to note that these funds are not borrowed. They are a gift and there is no expectation that they will be repaid. If you are purchasing the property from a family member, they may also gift to you a portion of the equity in the home. Your lender will require you to provide a gift letter which essentially is a letter from the person who is giving you the money stating that it is a gift and there is no expectation of repayment.<\/span><\/p>\n 2. Seller Contributions<\/strong><\/span><\/p>\n FHA guidelines allow for seller contributions up to 6% of the purchase price of the home. This is more than enough to cover your closing costs. Especially when you consider the fact that FHA closing costs range from 2%-5%. In this case, you are using your closing cost money for the down payment.<\/span><\/p>\n These seller contributions are handled at closing which means you do not need to come to the table with those funds. However, they must be negotiated in advance.\u00a0 The contributions do not have to come from the actual seller of the home. “Seller” also means the builder, the real estate agent or any other interested party on the selling side of the transaction.<\/span><\/p>\n The 6% contribution may be used towards the following:<\/span><\/p>\n How can you get the seller to pay for these costs? It really is not that difficult. The seller wants to sell the home. You have a good faith estimate already detailing what your closing costs will be. As an example, let’s assume that you negotiated a reduction in the listing price of the home by $5,000. You can see that your closing costs will be $3,700. At that point, you ask the seller to only reduce the price of the home by $1,300 but then also pay for $3,700 in closing costs. For the seller, it should make no difference. <\/span><\/p>\n This seller contribution tactic is used in many purchase and loan situations and is not specific to FHA loans. It actually may benefit you to offer full price on the purchase of the home if the seller agrees to cover\u00a0 your closing costs. Your difference in your monthly payment will be negligible.<\/span><\/p>\n 3.Lender Credit or Premium Pricing<\/strong><\/span><\/p>\n I mention premium pricing because what happens when a lender provides you with a closing cost credit is that they charge you a bit of an interest rate premium to offset those costs. If for example, the lender is going to cover your $3,700 in closing costs, they may have to increase your rate by a an eighth or a quarter point. This will trigger additional compensation for them to cover your closing costs. Make sense?<\/span><\/p>\n We are permitted to cover some of your costs via the lender credit or premium pricing and those funds:<\/span><\/p>\n Any and all use of lender paid funds must be disclosed in the closing documents. This is anothe3r way to shift the funds you would have used for closing costs to be used towards the down payment.<\/span><\/p>\n 4.Down Payment Assistance\u00a0<\/strong><\/span><\/p>\n There are many down payment assistance programs in every state. This assistance often will cover your down payment and in some instances, some or all of your closing costs too. Some points about down payment assistance:<\/p>\n If you are interested in using down payment assistance, we can help you to get lender provided down payment assistance as part of the loan package.\u00a0 It is a much easier and more streamlined way to secure down payment assistance and your FHA loan together.<\/p>\n In some instances, the assistance essentially a second loan that you will eventually have to repay. You may also be offered assistance that is forgivable if you keep the loan for a minimum number of years.<\/p>\n If you would like to discuss down payment assistance, contact us here<\/span><\/strong><\/a>.<\/p>\n I have outlined multiple ways to buy a home with an FHA loan without using any of your own funds. If you follow these three steps, you should be successful in reducing your out of pocket expenses when purchasing a home with an FHA loan. Hopefully you found this to be helpful and that you will trust us to also help you with your home loan.<\/span><\/p>\n Click For A No Money Down FHA Loan Quote<\/span><\/a><\/p>\n No Money Down FHA Loan Frequently Asked Questions – FHA FAQ<\/strong><\/span><\/p>\n Q: Can you refinance with an FHA loan or even get an FHA Cash Out Refinance loan?<\/strong><\/span><\/p>\n A: You can refinance an FHA loan, cash out with a refinance, or get a streamline refinance without an appraisal. Click to read about the<\/span> FHA Streamline Refinance Program.<\/strong><\/a><\/span><\/p>\n Q: Is it easy to get an FHA loan?<\/strong><\/span><\/p>\n A: It is easy to qualify for an FHA loan but there is a little more paperwork needed for these loans. A little more difficult or time consuming for your lender.<\/span><\/p>\n Q: Are FHA loans just for first time home buyers?<\/span><\/strong><\/p>\n A: Although FHA loans are popular with first time home buyers, they are also for anyone who can meet their qualifications. They are not limited to first time home buyers.<\/span><\/p>\n Q: What is the FHA down payment requirement?<\/strong><\/span><\/p>\n A: You will need to put down 3.5% for an FHA loan unless your credit scores are below 580. For credit scores under 580, the down payment is 10%<\/span><\/p>\n Q: Can I get a no money down FHA loan?<\/strong><\/span><\/p>\n A: You can get an FHA loan without using your own money out of pocket.<\/span><\/p>\n Q: Do FHA loans require mortgage insurance?<\/strong><\/span><\/p>\n A: All FHA loans require mortgage insurance regardless of how much you put down on the home.<\/span><\/p>\n Q: Can veterans apply for an FHA loan?<\/strong><\/span><\/p>\n A: Veterans can apply and get approved for an FHA loan, but they will need to submit a DD form 212 with your application. We believe the best program for veterans is the VA Loan<\/a>.<\/span><\/p>\nFHA Benefits and Requirements<\/h3>\n
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4 Ways To Get an FHA Loan With No Money Down<\/strong><\/h3>\n<\/div>\n<\/div>\n
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