KEYWORDS:Florida First Time Home Buyer Loan, New Jersey First Time Home Buyer Loan 2013,
FHA minimum credit score is 500. New FHA policy requires a minimum
credit of 500 to buy a home. In the old days FHA did not require any
credit score. These changes went in to effect in 2010. First time home buyer loan.
To buy a home you will need a minimum credit score of 500.
Borrowers with credit score above 580 require a 3.5% down payment. The funds can be a gift from a family member and up to a 6% seller concession is allowed. Often, 12 months of verifiable rental history is required for credit score below 640.
If you have credit scores below 580 new FHA changes require a 10% down payment. All funds can be the borrower's own funds or gifts are allowed. Up to a 6% seller concession is allowed. Often, 12 months of verifiable rental history is required for credit score below 640. If no verifiable rental history 3 months reserves will be required.
FHA changed it's collection account guidelines. Going forward all collection accounts within the last two years must be paid off. All collection accounts totaling over $1,000.00 must be paid off. Collection accounts that total less than $1,000.00 and are over two years old may not have to be paid off.
If you have collection accounts that are not paid off - FHA allows you to set up a payment arrangement to qualify. By setting up a payment arrangement FHA will allow you to make three on time monthly payments to qualify for a FHA loan.
FHA allows up to a 6% seller concession to purchase a home. So, if you want to buy a home for a $100,000.00 FHA will allow the seller to pay up to $6,000.00 for your closing cost (APR 5.98%). The seller must agree to a seller concession and in the above case you are allowed a seller concession of up to $6,000.00 for closing cost.
Your closing cost can then be rolled into your new loan.
FHA requires a 3.5% down payment. The down payment can be a gift from a family member or your own funds. So, in the above example the only down payment funds you will need to buy a $100,000.00 home is $3,500.00.
Seller concession must be added to the sales contract.
When you find a property you want to make an offer on you must include the seller concession in the sales contract. You can write it in two ways as a dollar amount (seller will pay up to $6,000.00 for closing cost) or you can write it in a percentage amount (seller will pay up to 6% of the purchase price for closing cost).
First Time Home Buyer Loan