FHA & Nehemiah

April 30, 2008 · Filed Under Real Estate 

As home prices drop and interest rates remain fairly stable what loan program is available to those who have little to no money for downpayment and closing costs now that the 110% stated income loans are a thing of the past?

Well, FHA is one really good option. And, for those who have 0 dollars to work with and good credit FHA can be used in conjunction with the Nehemiah Program.

Here are a few quick bullet points on FHA and Nehemiah guidelines…

FHA

  • Up to 97% financing
  • Allows all gift down payment
  • Government insured loan
  • No minimum FICO, although interest rate can be affected by scores lower than 600
  • Allows for alternative credit refrences when no FICO is present
  • Debt to income ratio guidelines are set at 29/41 (housing/total debt ratio) and have been known to approve higher when there are compensating factors such as good credit, cash reserves, etc…
  • Spouses must be reviewed and debt included in the debt to income ratios, UNLESS they are legally divorced.
  • Allows for Non-occupying Co-borrowers
  • No reserve requirements
  • Underwriting standards more lenient than conventional loans
  • Mortgage insurance required
  • Must be owner occupied (unless investor is purchasing a HUD repo)
  • Allows up to 6% seller contribution towards closing costs. That means seller can actually donate 6% to Nehemiah for down payment and another 6% can be used as a seller contribution towards closing costs to buy down interest rate and so on…If you can negotiate that much of a seller contribution.

Nehemiah

  • Seller funded down payment assistance program
  • Nonprofit group that receives sellers funds and transfers them to the borrower in the form of a gift (allows for a perfect, match to FHA, which allows an all gift down payment)
  • Charges $299 for the transaction
  • No qualifying guidelines, if you qualify for the primary loan, Nehemiah approval is automatic
  • Allows gift of up to 6% of total purchase price for down payment and/or closing costs
  • do not have to be a first time homebuyer
  • Resale and New Construction allowed
  • No repayment of gift money and no additional liens against the property
  • No income or asset limitations

So jump down off that fence you are currently sitting on and grab a bit of the American Dream. This just may be the very best time to do it.

 

Kelly…

Comments

One Response to “FHA & Nehemiah”

  1. Carla Wilson on April 30th, 2008 3:26 pm

    I loved it Mr. Kelly! Very informative!

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