The last option that I want to discuss is the FHA loan. This loan through the Federal Housing Administration has come a long way. This loan used to be very difficult to obtain with lots of paperwork and very strict repair standards. This is no longer the case. Now FHA loans can easily compete with conventional 30 year loans.
While it's not 100% financing, FHA loans only require a 3.5% down payment. The down payment can be a gift from a family member but cannot be contributed by anyone involved in the real estate transaction (i.e., the sellers, real estate agent, etc.) and cannot be required to be repaid by the individual applying for the loan.
The home must also pass an FHA appraisal which basically checks the value and livability of the home. The main items that must be present are flooring (there cannot be a bare concrete slab), heating in each room (yes, even in Florida), the roof must have at least two years of life remaining and there are limits to how close the septic and well can be. There are other items the appraiser will look at but these are the big ticket items. This inspection does not replace a typical home inspection!
There are many other options available through conventional financing but the three that I've covered in this series are some of the best for individuals having a hard time coming up the 20% down payment. If you think any of these may work for your situation, please talk to your lender or your real estate agent. If you're agent isn't familiar with these programs, you may want to consider another agent.
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