Profile picture for LauraLovell11

which loan program will allow us to buy a home from a relative? Usda? Fha?

my mom and her longtime boyfriend are going to help us buy a house. They are putting 20% down and getting a loan for 170: for the rest. How can we buy this house we will be living in when november comes along which will be 3 yrs past bankruptcy and foreclosure. Can we get usda loan? We will not have any $ down... How can we arrange title or any of that? My moms boyfriend can buy it perhaps but she wants to be on the titl in case something happens to him.. What can we do to buy it in 6 months? We are confused.        with no down payment and credit in mid 600ls  payment?
  • June 29 2010 - Winchester
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Answers (5)

It appears as though the key roadblock is the "foreclosure." FHA loans require a minimum of three years to have passed since the bank took back your home and I doubt any other loan program is going to be more lenient.  Keep in mind that is FHA's "minimum" amount of time.  Depending upon the rest of your credit profile the lenders may make you wait longer - or not.

Once you try to purchase from your mother it will be labeled as a "non-arms length" transaction and FHA limits the loan to 85% of the home's value.

FHA makes one large exception to the rule though - "Note:The 85% limit may be waived if the family member has been a tenant in the property for at least six months immediately predating the sales contract. A lease or other written evidence must be submitted to verify occupancy."

It's possible you might qualify for the full 96.5% loan from FHA if you can meet the guidelines. I'd get with a lender sooner than later to see if it can work for you.
  • June 30 2010
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What I don't understand is why are your mom & the boyfriend buying the house first?? Instead of your mom putting 20% down buying the house, she could give you the FHA down payment of 3.5% as a gift and you buy the house directly yourself. Every time you purchase a house you have to pay loan fee's, appraisal fee's, closing cost's etc. Why pay all these fee's twice in a very short period of time? I am not a lender, therefore I would recommend to talk to an experienced FHA loan agent first. 
  • June 29 2010
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Profile picture for Mr Caveat
sorry, i missed that your score was already in the mid 600s
  • June 29 2010
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Profile picture for BobPhillipsRE
You can probably get a property with an FHA loan, with a relative co-qualifying with you.  I'm not a lender and not really up to speed, but when I last checked you just need a FICO in the 620+ range.

Also, your relative can gift the ENTIRE down payment, and all closing costs, so if that's doable - which it sounds like it is, you should be fine going FHA, with your relative co-qualifying - up to the FHA loan limits for your County.
  • June 29 2010
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Profile picture for Mr Caveat
you probably cant do anything except pay the mort unless you improve that credit score and save at least a 3.5% down payment,

unfortunately having a mom with good credit and a good job is not enough to get you a loan. you have to qualify on your own.

  • June 29 2010
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