Profile picture for sunnyview

Minimum down payment for FHA?

I would like to know if FHA still has a minimum down of 3.5% or if that has been raised. I thought that I had read that is was going to go up, but I can't seem to find out when or by how much. Also, is there a credit score cutoff for the FHA loans. I thought that I read that is was 620, but I don't know if that's right or not. I promise to leave thumbs for your help. :)
  • January 11 2010 - US
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Answers (6)

Profile picture for Keane Ng
No problem.  Good luck!
  • January 11 2010
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Profile picture for sunnyview
Thank you very much for all your help. I really appreciate it!
  • January 11 2010
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Profile picture for Keane Ng
The current down payment is at 3.5%.  There has been talks of moving it to 5% but nothing is concrete yet.

However, that does not mean you even have to put 3.5% down.  If you buy a HUD foreclosure, you're only required to put $100 down.  You can find a list of HUD foreclosures here:

http://portal.hud.gov/portal/page/portal/HUD/topics/hud_homes

I wrote a blog on the topic which you can read if you like:
http://www.keaneloans.com/2009/09/30/how-to-find-hud-foreclosed-homes-and-special-fha-loans/

Most FHA lenders still do require a 620 fico score or higher.  Also, you may see if you qualify for any down payment assistance programs in your area.  These are usually for first time home buyers who have moderate to low income for their area.  Local municipalities sometimes offer assistance in helping first time home buyers with their down payment.    They vary from area to area, so only a local expert of these programs can help you with this.  I only am familiar with ones in WA state.

Lastly, if you may check to see if you qualify for a USDA loan and see if your looking at homes in a rural area.  USDA loans are completely different than FHA but still government backed loans.  You can buy with 0% down and there's no mortgage insurance.  You must buy in a rural area and there are also income restrictions.  Here's a link to their property and income eligibility.

http://eligibility.sc.egov.usda.gov/

More info on USDA

http://www.ers.usda.gov/Publications/RuralAmerica/Sep2000/sep2000i.pdf

  • January 11 2010
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Profile picture for MagicalHouse
And that is why FHA is losing money!
  • January 11 2010
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Still 3.5% down. My company is still doing 580 minimum scores for FHA. They would need a 12 month paid on time rental history, 3 open active tradelines open for 12 months, down payment money has to be theirs.... no gifts. Rates are 5.0 - 6.0 30 year fixed and in the 4's for 5 year ARM.

Underwriting and closing these loans is just as easy as the 620+ crowd.
  • January 11 2010
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So far still 3.5% down and most lenders adhere to a 620 FICO minimum.  There are a few that will go down to 580 but those are far from automatic approvals
  • January 11 2010
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