FHA Loans (loan, real estate, fees, refinance)

[Cj31299]

I foound a house today that we really liked and am thinking that we will have to go with a FHA loan ( no money for down payment) We did not use a real estate agebt and was wondering if it is possible can we get the seller to offer the 3% that they would pay our agent to our down payment since we don't have the money for it. I am not sure if this is allowed by FHA. I know that they have down payment assistance programs that you can apply for but am not sure about this. Thanks in advance.

[rcarrillo]

You should look into the DPA programs the FHA allows, this is the type of situation they were created for. The best step is to find a mortgage broker or banker that has experience with FHA and these programs so they can advise you.

There are about 3-4 programs like Nehemiah, Ameridream, Genesis, etc that allow this. They are pretty simple and easy to get, but the first step is to make sure you qualify for FHA financing and that you are doing the paperwork properly.

[renriq02]

Make sure you apply first before you even decide to put in an offer on the home. This will save you the headaches down the road.

A realtor isn't necessary for this, but you will need to negotiate everything.
Seller is allowed to pay up to 6% of the closing costs, but you will need a DPA program to use 3% for a down payment. The required down payment is 2.25% or up to 3%

[scgraham]

Originally Posted by Cj31299

I foound a house today that we really liked and am thinking that we will have to go with a FHA loan ( no money for down payment) We did not use a real estate agebt and was wondering if it is possible can we get the seller to offer the 3% that they would pay our agent to our down payment since we don't have the money for it. I am not sure if this is allowed by FHA. I know that they have down payment assistance programs that you can apply for but am not sure about this. Thanks in advance.

While you don't have to engage a buyer's agent, you have to understand that no one is legally looking out for you; not the seller, not the seller's agent, not the mortgage broker nor the lender.

Just two weeks ago, I helped a first time home buyer put together a deal for a down payment assistance (DPA) - FHA loan. We got $30K off the house, the builder contributed 3% toward closing costs and 3% for the DPA. I gave the buyer a 1% rebate to cover the remaining fees and they walked away from the closing with their $1,000 earnest money that was put up at contract signing.

This all requires an understanding from you buyer’s agent regarding loan programs -- and the willingness to go to bat for the buyer.

[scgraham]

Originally Posted by renriq02

Make sure you apply first before you even decide to put in an offer on the home. This will save you the headaches down the road.

A realtor isn't necessary for this, but you will need to negotiate everything.
Seller is allowed to pay up to 6% of the closing costs, but you will need a DPA program to use 3% for a down payment. The required down payment is 2.25% or up to 3%

For FHA, the seller can contribute up to 6% for settlement fees and another 3% for the DPA. The total contribution is really 9%.

[renriq02]

Nor the buyer's agent.

Remember that the realtors, and mortgage brokers are commissioned based workers.

An appraisal or CMA will help you find a good value for the home. If the home is listed, then you find out how long the home has been on the market to negotiate better.

Many ppl are using discount brokerages like RedFIN that charge a low fee instead of the 3% commission (buyers agent) or up to 6% if they broker both sides.

Companies like these will put a lot of real estate brokers out of business, and other companies are arising to also put mortgage brokers out of business.
The only person that can help you 'legally' is an actual attorney. A lot of states require them at purchase closings, and some even require them for refinances.

Originally Posted by scgraham

While you don't have to engage a buyer's agent, you have to understand that no one is legally looking out for you; not the seller, not the seller's agent, not the mortgage broker nor the lender.

Just two weeks ago, I helped a first time home buyer put together a deal for a down payment assistance (DPA) - FHA loan. We got $30K off the house, the builder contributed 3% toward closing costs and 3% for the DPA. I gave the buyer a 1% rebate to cover the remaining fees and they walked away from the closing with their $1,000 earnest money that was put up at contract signing.

This all requires an understanding from you buyer’s agent regarding loan programs -- and the willingness to go to bat for the buyer.

[renriq02]

I dont recall posting a 'total' contribution.

Bear in mind that the seller isn't really paying anything.
The buyer is paying these things out of the overall loan amount.

Originally Posted by scgraham

For FHA, the seller can contribute up to 6% for settlement fees and another 3% for the DPA. The total contribution is really 9%.

[renriq02]

I apologize for not mentioning that with Ameridream you can go up to 10%

Originally Posted by scgraham

For FHA, the seller can contribute up to 6% for settlement fees and another 3% for the DPA. The total contribution is really 9%.

[scgraham]

Originally Posted by renriq02

Nor the buyer's agent.

Remember that the realtors, and mortgage brokers are commissioned based workers.

An appraisal or CMA will help you find a good value for the home. If the home is listed, then you find out how long the home has been on the market to negotiate better.

Many ppl are using discount brokerages like RedFIN that charge a low fee instead of the 3% commission (buyers agent) or up to 6% if they broker both sides.

Companies like these will put a lot of real estate brokers out of business, and other companies are arising to also put mortgage brokers out of business.
The only person that can help you 'legally' is an actual attorney. A lot of states require them at purchase closings, and some even require them for refinances.

If there is a written buyer brokerage engagement, a buyer's agent is legally bound to only look out for the buyer.

[renriq02]

In the State of NC...so do mortgage brokers, but neither one are qualified as legal experts.

Originally Posted by scgraham

If there is a written buyer brokerage engagement, a buyer's agent is legally bound to only look out for the buyer.