FHA - Limited Savings
Limited wage growth has impacted many Americans.
Stagnant incomes have made it difficult for consumers to save money as they spend the majority of their earnings on day-to-day living expenses. The FHA Mortgage Program can be a great fit for home buyers who have found it difficult to save money towards a down payment for purchasing a home. Benefits for borrowers with limited savings include:
Low down payments
FHA allows consumers to borrow up to 96.5% of the purchase price (or appraised value*) of a home. This lowers the amount of money that consumers need to have saved towards a down payment.
Gift funds are allowed for down payment and closing costs
Borrowers can use gift funds, for their down payment and closing costs, which are provided by relatives, employers, unions, charitable organizations, government agencies, and even friends with whom they have a clearly documented relationship. For consumers who have access to such gifts, this program feature further reduces the out-of-pocket costs involved with purchasing a home. It’s important to note that gifts cannot be given by a person or group who has an interest in the sale of the property (e.g. the seller or real estate agent) and no repayment of the gift is allowed.
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