“Help! I Need A Down Payment”
On October 1st 2008 the Federal Housing Administration (FHA) implemented the Housing and Economic Recovery Act of 2008 (ACT). The ACT effectively ended seller funded down payment assistance which has been utilized for years to allow home buyers to secure an FHA mortgage without making an out of pocket down payment. The language in the ACT explicitly prohibits the following sources from contributing funds to the home buyer’s cash investment:
· The seller or any other person or entity that financially benefits from the transaction.
· Any third party or entity that is reimbursed by any of the parties identified above.
"I am qualified for an FHA Loan, but I simply don't have 3.5% down!"
FHA still allows, and has always allowed, family members to help with the costs of acquiring a home in the form of a gift or a loan. The specific guidelines that apply to funds contributed from a family member are summarized below as contained in HUD Handbook 4155.1 REV – 5 Paragraph E.
· Family members may contribute funds to the borrower in the form of a gift or a loan.
· FHA permits family members to lend on a secured or unsecured basis up to 100% of the homebuyer’s required cash investment.
· The family member is allowed to borrow the funds used to make the gift or loan as long as the entity or individual lending the funds does not have an interest in the sale of the property. Specifically, the funds cannot be directly or indirectly borrowed from the seller, builder, loan officer, real estate agent, or any other related party.
"How Can FHA Family Lending Help Me?"
FHA family lending is owned and operated by me – Spencer Anderson. I am a private equity investor and I specialize in making small, FHA allowable loans, designed to assist borrowers in obtaining funds required for a down payment. Per the guidelines stated above, I lend directly to a buyer’s family member, and the family member then lends or gifts the money to the buyer. I lend my own personal funds and I do NOT accept contributions from any third party, this includes sellers, realtors, builders, loan officers, or any other related or unrelated entity. Please don't let past credit obstacles keep you, or your family member, from applying. Credit scoring is only a small part of the overall required approval criteria. Click the link below to read how it works or learn on the go by simply completing a loan application.
How It Works
