FHA Down Payment Assistance
FHA mortgage loans provide many options to the homebuyer. FHA offers down payment assistance programs that make this loan very desirable to buyers with little cash. Even with out the gift or grant programs a buyer can usually get an FHA loan with as little as a 3% contribution. This means moneys applied to closing costs or down payment. It is a little more confusing than conventional loans but the interest rate is as good or better so it is definitely worth the effort.Visit to : http://available-grant-money.blogspot.com
A gift for both the down payment and the closing costs can come from acceptable sources such as: a family member, a close friend, a borrower's employer, a charitable institution, or a governmental agency or public entity that has a FHA down payment assistance program.
All of the money for the down payment and closing costs may come from a gift or grant program. The funds must be documented to show that no repayment is required and the donor will not put a lien on the property. The gift may not be used to meet the borrower's 3 months PITI (principle, interest, taxes, and insurance) reserves that are needed if they are purchasing a for 3 and 4 unit property.
Gifts absolutely can not be used to increase the borrower's remaining reserves after closing that could change the Loan Prospector findings from a Refer or Ineligible to an Approve Eligible or Accept status. The underwriter must review the findings to make sure gift money is not used in the calculations of the remaining reserves reviewed by the system. Any gift amount must be deducted from the reserves shown on the findings and the loan must be re-run through loan prospector to provide an accurat calculation of the borrower's assets. Only then can they obtain a clear approval.
A gift letter must specifically state there is no repayment and clarify that the gift donor is not tied to the loan transaction in any way.
The transfer of money from the donor to the borrower must be documented. A copy of the canceled check or other satisfactory withdrawal document that shows the gift leaving the donor's account and put into the borrower's account is acceptable or if the gift money is being received at the closing table a certified check from the donor and a copy of the withdrawal receipt is required. Copies of these documents must be retained.
This is a little tricky. If the donor borrowed funds for the gift he must provide documentation that shows, with out a doubt, that the funds were not borrowed from a party to the transaction. Cash-on-hand from the donor is absolutely not acceptable.
There are many benefits to an FHA loan. Did you know a person can qualify if they are in a chapter 13 bankruptcy? FHA has a terrific no qualifying stream line refinance. FHA is also one of the few remaining lenders that has a program for manufactured homes. The interest rates are excellent. http://available-grant-money.blogspot.com
