Out of all the Mortgage/Loan Programs with Low or No Downpayment Still Available In Connecticut, FHA Mortgages are the ones that I do the most. I would say that at least 70% of my loans that I have done this year have been FHA Mortgages. You would think that since this Loan Program is the one that I utilize the most, that it would be the easiest for me to write about, but it is opposite. There is so much to this Loan Program, that it makes it difficult to try to capture all of it in just one blog. Luckily I have written several blogs in the past on FHA Mortgages, so in this blog I will only hit upon a few of the main features of this Loan Program, and then provide links at the end to my other blogs for further details.
Out of the four Mortgage/Loan Programs with Low or No Downpayment Still Available In Connecticut that I chose to write about in this series, FHA is the only one of the four that is not 100% financing or that presently does not have an option to make it a 100% financed Mortgage. So why then is this Loan Program the one that I utilize the most? The answer is simple. FHA Mortgages only require a Downpayment of 3.5%, which does not have to come from the Borrower's own money, it is available to all Borrowers, and it has fewer restrictions than do the other Loan Programs that I have written about in this series. Those reasons and more make FHA Mortgages a very attractive Mortgage/Loan Programs with Low or No Downpayment Still Available In Connecticut.
Even though FHA is not a 100% financed Loan Program, it does not mean that a Borrower has to have the Downpayment and Closing Cost in his/her own money. As I mentioned before even though FHA Mortgages require a 3.5% Downpayment, none of it has to come from the Borrower, it can be gifted from one of several eligible sources such as a relative, employer or labor union, a charitable organization, a governmental agency or public entity that has a program to provide homeownership assistance to low-and moderate-income families or first-time homebuyers, or a close friend with a clearly defined and documented interest in the borrower.
The same is true for Closing Costs, these funds also do not have to come from the Borrowers own money, they also can be gifted, or they can be paid by the Seller. FHA allows Sellers to pay up to 6% of the Sales Price towards Closing Cost. The only restriction is that they cannot contribute more than the Closing Costs, meaning that the Borrower cannot get back any remaining money that the Seller has agreed to pay, if it is not use on Closing Costs.
Another reason why FHA Mortgages are one of the preferred Mortgage/Loan Programs with Low or No Downpayment Still Available In Connecticut, is that FHA Mortgages do not have any of the extra points that are assessed to Conventional Mortgage by Fannie Mae & Freddie Mac, because of low credit scores or downpayment. In fact FHA does not have a minimum credit score, Investors may impose a minimum credit score, but FHA does not. This alone is a huge advantage that FHA Mortgages have over Conventional Mortgages.
Unlike some of the Mortgage/Loan Programs with Low or No Downpayment Still Available In Connecticut, FHA Mortgages do not have any Income Limits, and even though FHA Mortgages have Loan Limits, in many cases the FHA Loan Limits are higher than the Conventional Mortgages Conforming Limits.
For all these reasons FHA Mortgages should be one of the main Mortgage/Loan Programs with Low or No Downpayment Still Available In Connecticut. There is much more to FHA Mortgages, and if you follow the links below they will provide you with much more information.
FHA The Main Loan Program In Connecticut!!!
PMI Changes Making FHA and VA Much More Go To Loan Products
HUD Website Great Resource For Homebuyers
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Info about the author:
George Souto is a Loan Officer who can assist you with all your FHA, CHFA, and Conventional mortgage needs in Connecticut. George resides in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Higganum, Haddam, East Haddam, Chester, Deep River, and Essex. George can be contacted at (860) 573-1308 or gsouto@mccuemortgage.com
George, you sure are supplying your buyers with a lot a of great information.
George I would venture to say that FHA is probably the most favored program in the state especially as some of their programs offer better rates than CHFA.
Debbie I try my best to do that and it usually results in business.
Ed, your right there has been times this year the FHA has been a better deal than CHFA. It is definitely a better deal than conventional in most cases these days.
George, this is great info. I love reading up on what you have to say. Each and every time I learn something, so I thank you!
George, you are providing great info, as always. I'm glad you mentioned about FHA not requiring a minimum credit score. Many people are not aware of that.
Andrea, it seems that we all learn from each other when we take the time to share.
Jen, I think that the confusion about that is because many investors/lenders are instituting there own limits even though FHA does not.
I am glad you posted this, George. I have a buyer whose credit is good, but income will not allow them to qualify for any 100% financing program available in CT, and they are upset. I'll pass this along to them so we can either change strategies or look at alternative options.