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Do you need any to show any 'reserves' in your bank account to qualify for an FHA loan?

I'm trying to decide between a conventional and FHA loan...I can put 10% down and have closing costs and maybe like 2 mos of "reserves" but my broker (not an FHA broker) tells me I need to have that money for 3 months straight in order to qualify for a loan. Since some of the DP is coming from parents, the 3 month thing is causing a problem for me if i find something soon. I have a good credit score and stable income.
  • March 13 2009 - San Francisco
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Answers (3)

No reserves needed. just need to prove your EMD and down payment. If both items came from a gift then you could show 0 and be fine
  • February 21 2014
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If you can put down 10% and you have good credit, it's a "no brainer", you go conventional.  The rate is much better, you're not financing or having to pay upfront mortgage insurance, just the monthly escrow portion, and your closing costs will be cheaper.  Typically you can avoid the origination fee with conventional financing, not so with FHA.  As long you have 5% of the downpayment yourself, the balance can be gifted by your parents and evidenced by providing a copy of their check prior to depositing it in your account.  Your money needs to be seasoned in your bank account for 60 days not 3 months.  Good Luck.
  • March 13 2009
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On FHA you are not required to have any months of reserves in order to qualify for this loan and just so you know the private mortgage insurance in a convetional loan might be higher then the monthly mortgage insurance in a FHA loan in regards to your fico the minimum you need to qualify is 620 and in some casis you can go lower then that I know some lenders that go lower. please give me a call if you have any more questions we are an FHA approved lender
  • March 13 2009
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