Many buyers are not aware that FHA & HUD have a special $100 down mortgage program, mainly because this is a specialty program. In fact very few lenders and banks specialize in and offer the HUD 100 down program.
The property must be a HUD owned home. Basically a HUD home is a home that was foreclosed on and had a FHA-insured mortgage. HUD pays off the losses of the lender and takes the home back to sell and recoup their losses. It is then offered for sale at market value, based on a recent AS-IS appraisal, meaning, and the market value in its current condition. If you find a HUD home you like, a HUD registered realtor is needed to help set up a showing and to make a bid. Also, the buyer will still need to pay earnest money(deposit) for the home as well.
The benefits of the HUD $100 down home loan.
- Only $100 down payment is required to purchase one of these homes (some closing cost may still apply.)
- Offers the Lowest Down Payment requirement (very close to 100% financing.)
- Generally easier to qualify for than conventional loans.
- Generally offers lower interest rates than conventional loans.
- Total loan amount cannot exceed FHA maximum county loan limits.
Wright Mortgage works with numerous FHA lenders that offer these $100 Down HUD REO
The Federal Housing Administration (FHA) offer a program called the $100 Down Payment Incentive that’s designed to help the Department of Housing and Urban Development (HUD) get rid of unsold HUD homes.
In other words, no matter how much the house costs, you only have to put down $100, whether you’re a buyer or an investor.
Of course, that isn’t the sum total of the cash you’ll need. There are closing costs, although FHA will kick in as much as 3 percent of the sales price toward those closing costs. Plus, it will finance the transaction for those who plan to live in the house as a primary residence.
So, what is the catch to the HUD REO 100 Down Mortgage? The only catch is the property must be a HUD owned home. Basically, a HUD home is a home that was foreclosed on and had an FHA-insured mortgage. HUD pays off the losses of the bank or lender and takes the home back to sell, thus recouping their losses. It is then offered for sale at market value, based on a recent AS-IS appraisal, meaning, and the market value in its current condition. If you find a HUD home you like, a HUD registered realtor is needed to help set up a showing and to make a bid. HUD homes are listed for sale by management companies under contract by HUD.
Wright Mortgage offers an innovative new loan program to homebuyers – before they find their home!
We can complete the loan process – actually approving your buyer – without an identified property.
With TBD Approvals, buyers have the confidence that they have already been approved for their mortgage which means their buying power is improved:
- Sellers know the loan process has been completed so there is no worry that the sale won’t close.
- Buyers can negotiate a good purchase price because they know they can close quicker than with a traditional loan process and they can offer the seller an assured closing
How does it work?
- The buyer completes a mortgage loan application with Wright Mortgage, providing us with all of the information needed for a mortgage loan – except for the address!
- We process the loan and, upon approval, we’re ready to close once the property is identified.
Who is eligible for this program?
- Those mortgage loan borrowers who have challenged credit or very high debt to income ratios.
- Your clients are available for both FHA insured mortgage loans and Conventional mortgage loans, people who have excellent credit or people who is below 640 credit score and consider below average credit.
- Qualify more borrowers with credit challenges to achieve the American Dream.
Wright Mortgage offers portfolio lending and welcomes interested consumers looking for options to make their dream of owning a home a reality. These products are another option for someone who could not qualify for a traditional Fannie Mae or Freddie Mac loan. Products offered by Wright Mortgage include:
- Jumbo Alternative – This lending option offers alternatives for buyers looking for loan amounts up to $2 million with flexible guidelines. A 90% loan to value (LTV) ratio, debt to income (DTI) ratio up to 50 percent and an interest-only option are offered. Types of acceptable income documentation include restricted stock units, asset depletion and additional solutions for self-employed buyers.
- Homeowners Access – This solution was designed to assist buyers achieve or re-establish homeownership. Maximum DTI accepted is 60 percent, and there are special considerations for late mortgage payments within the last year or a housing or credit incident greater than 24 months. Buyers may be eligible for financing that was not previously available to them through alternative lending means.
- Fresh Start – This lending option is for buyers that have not been able to receive financing because of a short sale, bankruptcy, foreclosure or a deed in lieu within the past 24 months.
- Foreign National – This option helps make buying a second home in the United States easier for qualified non-citizens who visit the country regularly for business or vacation. There are both fixed- and adjustable-rate options available, along with flexible guidelines to help qualified Foreign National buyers obtain home financing.
Why pay more than you have to? Don’t wait!
Changing the terms of your loan can benefit you and maximize your monthly income. A lower monthly mortgage payment can help free-up money you can save, invest or use for other expenses. When rates are favorable, refinancing to a lower rate or longer-term mortgage can keep more money in your pocket every month.
Use our easy Quick Quote on the right, to help you see if refinancing can save you money.
You can also fill out our short application to see what rate you qualify for and obtain a pre-approval letter. Of course you can always call and speak to one of our loan consultants.
Our refinance calculator will help you to decide whether or not you should refinance your current mortgage at a lower interest rate. This calculator will calculate the monthly payment, net interest savings, and the time it will break even on the closing costs.
When you purchase a new home, you will receive a LE (Loan Estimate) from your title company approximately when you will go into escrow. This LE will describe in detail the information for your escrow account; this is commonly referred to as insurance impounds and property tax. This may or may not be necessary depending on the agreement you and your lender reach. Here’s what you need to know about escrow:
Previously, home buyers would be responsible for paying their property taxes at the end of the year. However, many homeowners didn’t budget properly throughout the year and thus ran short on funding. Therefore, many lenders started asking homeowners to pay these taxes and fees throughout the course of the year as opposed to at the end of the year. The overall goal of this was to have the lender pay the fees on the borrower’s behalf each month to minimize any errors or missed payments. For their services, lenders receive interest on the escrow funds. Often, lenders will ask for anywhere from three to six months’ of property taxes to open an escrow account.
Private mortgage insurance (PMI) is yet another source of overcharges and unjustified costs that homeowners need to scrutinize. You need to know how to cancel PMI when it is no longer needed, both under lending guidelines and under a new federal law that took effect in July, 1999.
Good Intentions Gone Bad. The practice of requiring PMI is actually well-intentioned. By insuring lenders against risk, PMI helps homeowners obtain financing when they can’t afford to make the standard 20 percent down payment. The initial down payment can be as low as 5 percent, so long as the borrower is willing to pay an extra monthly or annual charge toward PMI. Although PMI makes the down payment more affordable, the homeowner does not otherwise benefit from paying the premiums – this insurance simply protects the bank, not the homeowner, from loss in case of foreclosure or default on the loan.