mortgage

7 crucial facts about FHA loans

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Minimum down payment is 3.5%
Minimum down payment is 3.5% © Andy Dean Photography/Shutterstock.com

Minimum down payment is 3.5%

For most borrowers, the FHA requires a down payment of just 3.5% of the purchase price of the home. That's a "huge attraction," says Dennis Geist, senior director of compliance and fair lending at Treliant Risk Advisors and formerly a vice president of government programs for another lender. In late 2014, Fannie Mae and Freddie Mac reduced minimum down payments to 3% from 10%, but such loans have limited availability.

FHA borrowers can use their own savings to make the down payment. But other allowed sources of cash include a gift from a family member or a grant from a state or local government down-payment assistance program.

SEARCH RATES: Ready for a mortgage with a low down payment? Search now for an FHA loan.

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Holden Lewis

Ask your lender to compare FHA with PMI

Unless you have stellar credit, you'll get a lower monthly house payment with an FHA loan than you will with private mortgage insurance with a tiny down payment.  ... Read more

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