I’m taking a brief blogging break. This is a reprint from Rain City Guide. To read the original post and 100 plus comments, click here.
My purpose for this post is to hit it home what a great window of opportunity we have with FHA Jumbo mortgages which are only around until December 31, 2008 unless Congress passes an extension of some sort (which is a possibility-but not guaranteed).
For the remainder of this year, you can use $17,550 to buy a home priced at $585,000 using FHA Jumbo with 3% down. FHA requires the buyer to invest 3% into the transaction (which can be a qualified gift). 3% of $585,000 = $17,550. (With roughly 5% down, utilizing FHA Jumbo, you can puchase a home for $600,000). The Seller can contribute up to 6% towards closing costs and prepaids as long as the buyers 3% required investment is met. With this scenario, the Seller is contributing around $14,000. The loan amount is just under the maximum allowed FHA Jumbo for King, Snohomish and Pierce County of $567,500.
With FHA there are no income limitations and much easier on credit scoring than conventional mortgages which ding you if your score is 719 or lower. Effective January 1, 2008 2009 (as things currently stand) the FHA loan limit will be reduced to their actual loan limit of $362,790 for King, Snohomish and Pierce Counties.
Of course, you’re not limited to FHA if you only have around $17,550. There’s also Fannie Mae Flex (someone please knock on wood fast before Fannie shelves decides to put this product on the shelf) which allows lower down payment–currently as low as 97%. However the highest loan amount allowed is the true conforming of $417,000. Utilizing a Fannie Flex program, you could purchase a home priced around $434,000 with the seller contributing about $12,000 towards your closing costs and prepaids.
So we’re talking $585,000 sales price using FHA Jumbo (while supplies last!) or $434,000 with Fannie Flex97 (while this product is still available) if you have $17,550 for a down payment. Can you see why I’m so crazy about FHA Jumbo? This is a window of opportunity for those who qualify for the payment but may be shy on the down payment that’s scheduled to close on December 31, 2008