Mortgage Financing Options for Little or No Money Down

[Ron Withers]

There was a time when there were a number of mortgage financing programs/options that were available for 100% financing. Those days are gone...for the most part. Currently there are only two (2) remaining true 100% financing programs in the mortgage marketplace. They are VA loans (for military veterans with a Certificate of Eligibility) and the USDA Rural Housing loans. You do not have to be classified as a first-time homebuyer for these programs.

In additonal to the above, the equivalent of 100%+ mortgage financing may be done with FHA and the FannnieMae MyCommunity Mortgage (MCM) when the borrower is qualified for down payment assistance from a state or local housing agency (Mortgage Revenue Bond or State Housing Initiatives Partnership (S.H.I.P.) )

Given the current climate of the mortgage industry most borrowers obtaining conventional financing are looking at needing 10% down plus applicable settlement costs. The next best alternative and probably the most prevalent is FHA finaning. FHA guidelines require the borrower(s) to have a minimum investment of 3% from their own funds. This investment can come as a gift. There is considerable flexibility for the sources of funds used to cover the settlement costs.

Given the almost daily changes that are occuring, now it even more important for a prospective buyer to obtain a quality pre-qualification or pre-approval from their mortgage professional (loan officer/mortgage broker). While it has always been a bit of an "art" for a loan officer/mortgage broker to provide a buyer with a good pre-qualification or pre-approval I cannot overstate state that market conditions or circumstances warrant that a buyer work with a "true" mortgage professional who stays abreast of the changing market!

For more information about me and my services please visit me at:
www.RonWithers.com

[Bryant Tutas]

Thanks Ron. Make sure to tag all of your posts "mortgage" as I'm going to add a link to the front page for an agent resource.

[Ron Withers]

Broker Bryant,

The FNMA MyCommunity program has been revamped just about like everything else. Stricter guidelines, lower LTV, reduced seller concessions, etc. Right now the maximum financing is 97%. If borrower uses down payment assistance (community seconds) then CLTV can go to 105%. It is still a good option for some buyers. I just closed one last week with the borrower getting $59,900 in SHIP funds. I will try to put together a new/updated blog on the MyCommunity program and post in the next few days.

Likewise, the is a fairly new FHA product...the FHA 203k Streamline which should become a very popular financing program for buyers wanting incorporate some rehab/improvements
into their home purchase. I will put together a post on it as well.

[Bryant Tutas]

Thanks Ron. Great info!! I am really hating to see the demise of Ameridream and Nehemiah. I guess it's USDA Rural Housing from here on out.

Is it true that the FNMA My Community is also being revamped?