100% financing Archives

One of the biggest reasons holding people back from becoming homeowners is lack of funds, specifically to cover the cost of a down payment on a loan. Luckily, there are several assistance programs available to help people in those financial situations become homeowners by covering the required down payment. If you’re in a tight financial situation, make this the year you become a homeowner by checking out the Chenoa Fund Program.

The Chenoa Fund Program assists borrowers who lack funds by helping them finance the down payment requirement of an FHA loan, which is 3.5%. It essentially combines the ease of an FHA loan with a grant or second mortgage to cover the 3.5% down payment requirement, meaning you receive could receive up to 100% financing.

There are three different options to choose from based on your income. If your income is the same or less than 115% of your area median income, you might be eligible for a different program than if your income exceeds 115%. Let one of our Mortgage Loan Originators help you determine if and for what kind of assistance you may qualify.

Like any loan option, the Chenoa Fund does have a credit requirement. You must have a minimum of 620 FICO score and all additional FHA loan criteria must be met. In some instances, a non-occupant co-borrower is allowed.

As a homebuyer, you should research and discuss with your lender all the possible loan and program options available to you. If you’re thinking an FHA loan might be right for you, talk with your lender about the Chenoa Fund Program. Being unable to fulfill a down payment requirement is no longer a reason to stall your dreams of becoming a homeowner.

Proceeds from the financing can only be used for down payment. Closing costs and prepaid items are the responsibility of the borrower and must be paid by other FHA eligible sources. Please visit http://chenoafund.org/ for more information.

A Veterans Affairs (VA) loan allows you to buy your home with 100% financing or no down payment. However, there still will be other costs associated with the loan. You most likely still will need an earnest money deposit and closing costs to cover. You may be able to get the seller to cover some of the closing costs during settlement, up to 4% for a VA loan. When buying a home using VA financing, closing costs cannot be rolled into the loan. There are some costs that can be financed such as the VA funding fee.

For first-time home buyers, the VA funding fee ranges from 2.15% to 2.4% of the purchase price. If you are receiving any form of disability from Veterans Affairs, then the funding fee may be waived. The funding fee is based on various loan characteristics. On an Interest Rate Reduction Refinance Loan, an appraisal is not required, but the lender may require a drive-by-appraisal. Income documentation is not required, but source of income must be verified. On a purchase loan, the sales price cannot exceed the appraised value.

In general, when buying a home using 100% VA financing, the closing costs can range from 3.5% to 5.5% of the purchase price of the home. Closing cost can range from loan origination fees from the lender, credit report cost, appraisal, recordation cost, title fees, and transfer taxes, to name a few. If the 4% in closing cost assistance from the seller doesn’t cover these costs, then the remaining difference is the responsibility of the buyer. Also note, as a new home owner you will want to have some savings available after settlement in case of an emergency, and to pay for any added expenses once you move in, such as moving and purchasing curtains, lawnmowers, appliances, etc.

If you are ready to purchase a home with your VA benefits, keep in mind that there is a difference between down payment and closing cost.

Bruce Dorsey is employed by NFM, Inc. as a Mortgage Loan Originator, NMLS #174898. NFM, Inc. is a Veterans Affairs Automatic Lender (659985-00-00) under the trade name NFM Lending. NFM, Inc. is licensed as: Maryland Mortgage Lender (5330) under the trade name NFM Lending. For NFM lending’s complete licensing information, please go to www.nfmlending.com/licensing. NFM, Inc.’s Nationwide Mortgage Licensing System (NMLS) Company Identifier Number is 2893. NFM, Inc. is not affiliated with, or an agent or division of, a governmental agency or a depository institution. NFM, Inc. is an equal housing lender.

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