The Home Buyer's Korner

Information presented should be used for educational purposes only.

October 24th, 2015

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CREATING THE DREAM OF HOME OWNERSHIP

Real Estate G+

Mortgage Lender

General Contractor G+

Buy a Home with $100 Down

100 bucks

Get Pre Approved for a Home Loan

Did you know that FHA offers Homes with just $100 down? HUD’s Federal Housing Administration (FHA) was established in 1934 and has become a driving force over the years assisting Americans to achieve the dream of home ownership.

FHA allows owner-occupying home buyers purchase an affordable home with reduced down payments. A standard conventional loan requires a 5 percent down payment and has fairly stringent credit requirements like: a minimum FICO score of 660 or greater, several months of cash reserves and limitations on gift funds a home buyer can receive. Homes purchased with conventional financing also need to be in average or greater condition.

FHA on the other hand offer financing with just 3.5 percent and many homes owned by FHA can be purchased with just a $100 down payment.

Although FHA doesn’t set minimum FICO scores most lenders do, but they are low. Many lenders will offer FHA home loans with FICO scores as low as 620, with just a 3.5 percent down payment and some offer FHA Home Loans with FICO scores in the low 500’s with a 10 percent down payment. FHA also lets home buyers secure a 100 percent of the down payment as a gift. FHA also has a great home renovation program called the FHA 203K, which allow home buyers to purchase fixer uppers and offers additional funds to be included in your mortgage to complete need repairs.  Needless to say, it’s a great way to purchase a distressed home under market value, repair and create instant equity.  

From time to time, a homeowner falls into financial difficulty and unable to make their mortgage payments and if the loan was insured by FHA it ends up as a HUD owned property. When this happens, HUD resells those houses to eligible buyers through private contractor firms working with local real estate brokers.

Houses being sold by HUD do vary in quality, price and curb appeal. Some are in pretty good shape and are “move-in-ready, while others are in need of repairs. Some might even require extensive repair and rehabilitation before they will be ready for occupancy, but either of these are where the FHA 203K home loan can come into play.

Before the home is put on the market, HUD inspectors go through each home and determine how much work is required. When they inspect the home, they specify if work is needed and may allocate a dollar amount for repairs or recommend using an FHA 203K loan if the repairs are more extensive.

The best part of buying a home being sold by HUD is that you can do so with as little as $100 down. This applies to the home that is ready for immediate occupancy, as well as the homes in need of minor or major renovations.

To find a home being sold by HUD, go to HUD Homes. If you find a home that might work contact a network member lender in our Google Plus Communities that offers FHA 203K financing.

One common mistake that buyers often makes when making an offer on these properties is that they don’t ask for HUD to cover any closing costs. Just because your down payment is only $100, this doesn’t mean that you will be moving into your new home with only $100 out of pocket. If you have sufficient cash reserves to buy the home without any closing cost assistance, then you are in good shape. If, however, you are like many potential home buyers with limited cash on hand, then you will want to maximize the allowable seller concession.

In short, get a real estate agent in our network to represent you and have them prepare an offer to purchase with HUD pays the buyer’s customary closing cost and/or required prepaid items your lender will require to set up an escrow account to pay annual taxes and insurance.

Not all lenders participate in the HUD $100 program and for those that do, some won’t allow the repair escrow feature or FHA 203K rehabilitation option. It’s important to discuss with your loan officer there lender guidelines on these homes and find the right one for you.

HOMES FOR SALE LISTINGS

Livingston Homes for Sale

TENNESSEE HOME OWNERSHIP TOOLS

Your Home Purchasing or Refinancing & Renovation Tools,

Home Improvements, Home Renovations,

Mortgage Loan Officers, Real Estate Agents & General Contractors

are ready to assist you with your home purchase.

Here are just a few of the home improvements

you might consider with any Home Renovation loan

Repair or replace a roof

Install, replace or repair gutters and downspouts

Replace, repair or upgrade your HVAC system

Repair or replace plumbing

Install, repair or replace electrical systems

Kitchen remodeling (including the purchase and installation of appliances)

Bathroom remodeling, Full interior painting, Total exterior painting

Repair or replace a septic system and/or well

Disability access (wheelchair ramp, elevator, widen doorways)

Build, repair or replace a deck, patio or porch

Basement waterproofing and finishing

Abatement/Stabilization of lead-based paint hazards

Replace old windows, Room additions, Finish an attic

Add a second story to your home

Replace a termite damaged sill plate (a water-damaged sill plate also)

Possible landscaping items such as correction of grading & drainage problems,

tree removal, repair a driveway and sidewalks

FHA 203K

Your Home Purchasing or Refinancing & Renovation Tool

Mortgage Loan Officers, Real Estate Agents & General Contractors

are ready to assist you with your home purchase

FANNIE MAE HOMESTYLE

The Conventional Alternative to FHA 203K

Great for Real Estate Investors and Second Home Renovations

Mortgage Loan Officers, Real Estate Agents & General Contractors

are ready to assist you with your home purchase

USDA RURAL DEVELOPMENT

Up to $10K for Home Improvements, Renovations or a Simple Remodel

Mortgage Loan Officers, Real Estate Agents & General Contractors are ready to assist you

A SIMPLE HOME SHOPPING INSPECTION TOOL

Organizing your home shopping experience affords a wise decision-making process.

This simple home inspection tool makes your ultimate buying decision a smart one.

To print this document click on “Open in New Window” located at the lower right corner;

click on “File”; then click on “Print”. In the center of the screen you will

have the option to “Create A Printable PDF of the Presentation”.

START YOUR PATH TO HOME OWNERSHIP TODAY

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