Please email your buyer scenarios to Jeff Lazerson by clicking HERE or call him at (949) 322-8640 and let’s see if we can solve your loan approval challenges!

Week of 12/2/16:
Orange County FHA condo has income of $115,000, a 655 credit score, no money for down payment. He thinks he can’t get a home loan.
Down payment assistance program makes it a done deal. Borrower gets 4.5 percent of the total FHA loan amount (including financed MIP) contributed toward down payment. Seller makes a small contribution for closing costs. Loan is approved!
Example: $435,000 sales price requires a (3.5 percent) down payment of $15,225. Base loan amount is $419,775. Add 1.75 percent MIP totals out the loan amount at $427,121. Down payment gift (with no claw back on gift or prepayment penalty) is $19,220 or 4.5 percent of total loan amount. $19,220 minus required down payment of $15,225 leaves $3,995 left to cover closing costs. Loan origination fee is 1.5 percent of loan amount or $6,406. 
Between the $3,995 surplus assistance funds and a small amount from seller (perhaps $7,000 to cover impounds, etc.), escrow, title, underwriting, appraisal and impounds get covered. Deal gets done.

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Jeff Lazerson - Mortgage Columnist since 2011