| Low Down Loans Are Not Extinct | | | | for a seller, by way of a non profit group, to fund the |
| The Subprime mortgage meltdown almost completely | | | | down payment. This program is said to have |
| did away with the most aggressive types of 100% | | | | accounted for some 78,000 home purchases. There is |
| financing for home purchases. As with most products, | | | | strong support for reinstating this program in the next |
| though, the really bad stuff gets all of the press and | | | | stimulus package. The only other really significant |
| people tend to forget the more vanilla, tried and true | | | | change in FHA is that they have increased the |
| products. | | | | minimum credit score in certain instances, and instituted |
| So What Are My Options? | | | | rate bumps at certain lower scores. However, they will |
| There are still many programs available for the low or | | | | still lend to sub 600 credit scored borrowers. |
| zero down buyer. Many of these programs are for | | | | What other options are available? |
| specific niche groups like Veterans or State | | | | As I mentioned there are numerous other options |
| Employees or have specific income or geographic | | | | available to specific groups of people. If you are a |
| limitations. For the rest of us the primary financing tool | | | | State of California employee and a part of the |
| in today's market is FHA. FHA financing has been | | | | CalPers, JTRS or Calstrs retirement systems you may |
| around for all of the 25 plus years I have been in the | | | | be able to use some of your retirement funds for |
| financing game. The Federal Housing Administration, a | | | | down payment and these programs provide for lower |
| part of HUD, does not actual lend money rather they | | | | fees and enhanced interest rate options. The USDA |
| insure lenders against defaults by borrowers. They are | | | | has it's own "Rural" loan program providing 100% |
| like a PMI company is to conventional loans (FNMA | | | | financing for properties in designated areas. This |
| & FHLMC). FHA loans have always featured | | | | program is available to all first time home buyers. The |
| great flexibility and this remains the case. There is no | | | | VA provides a guarantee for veterans home loans |
| shortage of funds available for these loans either. | | | | with zero down as well. |
| What about the tightening credit requirements? | | | | Get Good Counsel! |
| Yes, even flexible programs like FHA have tightened | | | | It is vital that you connect with an experienced loan |
| there guidelines, but how do those changes really | | | | officer to insure that you are pursuing any and all |
| effect today's home buyer? FHA has increased their | | | | options that may be available to you. You may have |
| down payment requirement from 3% to 3.5%, hardly | | | | to go out and find a loan officer with a little more than |
| noticeable. It should also be noted that all of the down | | | | the average of 3-5 years experience that is prevalent |
| payment can come from sources other than the | | | | today to get the best guidance on these products. A |
| borrower, for example a gift from a close relative, a | | | | lot of loan officers entered the market during the |
| loan from a 401K or a Hardship Withdrawal from a | | | | period of time when the 80-20 low or no doc subprime |
| retirement account. The biggest change in the down | | | | financing ruled the day. Every program has it's individual |
| payment area has been the elimination of what was | | | | quirks and oddities and you need a solid professional to |
| called the "Nehemiah Program". This program allowed | | | | guide you to the right product and get you approved. |