FHA Downpayment – How Much Is Required & How Do I Qualify?

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FHA Downpayment – How Much Is Required & How Do I Qualify?

To obtain an FHA loan you will need at least 3% of the purchase price as a down payment. Conventional loans require more!

If you are purchasing a HUD home that 3% may be used towards your closing costs rather than a down payment so you can get into the HUD home for even less money out of pocket.

FHA guidelines allow you to use 31% of your income for housing costs and 43% for housing costs plus other long term debt. FHA tells us that if you exceed these ratios there are a few options to still get you qualified –

  • make a large down payment
  • show an ability to pay more toward your housing expenses
  • have substantial cash in the bank
  • have a net worth of enough to pay the loan no matter what your income
  • have a good credit history or limited credit use
  • money provided by an organization
  • buying a house that decreases your monthly housing expenses

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