FHA Purchase 3.5% Down
FHA Purchase 3.5% Down: Your Path to Homeownership
The FHA Purchase 3.5% Down program is a game-changer for aspiring homeowners, especially first-time buyers. This popular mortgage option, backed by the Federal Housing Administration, allows you to purchase a home with a minimal down payment of just 3.5% of the purchase price.
How It Works
With this program, you can buy a home by putting down as little as 3.5% of the purchase price. For example, on a $300,000 home, your minimum down payment would be only $10,500. This low entry barrier makes homeownership more accessible, particularly for those who struggle to save large sums for a down payment.
Eligibility and Credit Requirements
To qualify for the 3.5% down payment option, you’ll need:
- A credit score of 580 or higher
- A debt-to-income ratio typically below 43%
- Steady employment history
If your credit score falls between 500 and 579, you may still qualify for an FHA loan, but you’ll need to put down 10% instead.
Property Types
The FHA Purchase 3.5% Down program can be used for various property types, including:
- Single-family homes
- 2-4 unit properties
- Condominiums (in FHA-approved projects)
- Manufactured homes (with certain restrictions)
Additional Costs
While the low down payment is attractive, it’s important to budget for other expenses:
- Mortgage Insurance: FHA loans require both upfront and annual mortgage insurance premiums (MIP).
- Closing Costs: These typically range from 2% to 5% of the loan amount.
Benefits of FHA Purchase 3.5% Down
- Lower down payment requirement compared to many conventional loans
- More flexible credit requirements
- Competitive interest rates
- Allows for higher debt-to-income ratios in some cases
By offering this low down payment option combined with more lenient credit requirements, the FHA 3.5% Down program opens doors to homeownership for a wide range of borrowers, turning the dream of owning a home into a reality for many Americans.
