Is it possible to get an FHA loan with 100% financing? I’m in the process of applying for a loan with 3.5% down. Should I have nagotiated with the mortgage broker at the time of applying for the loan for a 100% financing before applying for the loan, or can I still nagotiate for 100% financing after I get approved?
If approved, can I still nagotiate with sellers like I would otherwise with a conventional loan?
What are some ways to get money back at closing and avoid paying closing costs? I have some ideas but I would like to get more input as to how to do this.
I am finally taking the steps to buying my first investment property and my mind goes blank. Am I too nervous because it’s actually real? Please advise!
Unfortunately it is not currently possible to get 100% financing on FHA. You cannot get any money back other that what you put in (meaning if you paid for appraisal you can get that money back). Also, the only way to avoid closing costs is to negotiate the seller to pay them. They can pay up to 6% of the sales price. Otherwise you will have to pay them. Closing costs are a part of doing business. Nobody works for free.
Also, you cannot get an FHA loan for an investment property unless you are purchasing as a HUD repo. If your broker is telling you otherwise then he may be lying about your intent to occupy the property which is mortgage fraud.
My broker and other investors that I know said I could get into a 2-4 unit, owner occupied, with the FHA loan. Is this still possible or would I strictly have to buy a SFH?
You can purchase a multi-unit using FHA as long as you plan to occupy one of the units. It is however a bit more complicated when it comes to qualifying as they only add the rental income as gross income; they do not allow it to offset the mortgage payment.
I copied this from the HUD handbook. Hope this helps.
Net rental income is the appraiser’s estimate of fair market rent from all units, including the unit chosen by the borrower for occupancy, less the appraiser’s estimate for vacancies or the vacancy factor used by the jurisdictional HOC, whichever is greater.
This calculation is used only to determine the maximum loan amount. Borrowers must still qualify for the mortgage based on income, credit, cash to close, and the projected rents received from the remaining units. The projected rent may only be considered as gross income for qualifying purposes; it may not be used to offset the monthly mortgage payment.