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FHA Loans and Down Payment Assistance

FHA Loans and Down Payment Assistance

Here’s a question we get from many new homebuyers: Do you have to use an FHA loan with down payment assistance? The answer is no — there are different types of mortgages available depending on your situation.

Each down payment assistance program has a list of “eligible first mortgages” that can be used with the program. A first mortgage is simply your primary home loan. And your down payment assistance can come in many forms, such as a gift forgiven at closing or a second mortgage — funded by a Housing Finance Agency (HFA), municipality, nonprofit or employer. Most down payment programs accept a range of first mortgages, including conventional, FHA, USDA and VA loans.

Loan types

FHA loans have long been popular for first-time homebuyers because of the low 3.5% down payment requirement and flexible credit requirements. However, it’s important to understand that conventional loans accept just 3% down and can be paired with a down payment assistance program. Plus, HFA Advantage or HFA Preferred conventional loans provide the lowest mortgage insurance rates for HFA loans — with or without a down payment assistance program.

It’s important to compare different mortgage loans to see what works best for your situation. keep reading

The post FHA Loans and Down Payment Assistance appeared first on Down Payment Resource.

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