FHA Now requires 3.5% Down Payment.

Starting today FHA will require a minimum down payment of 3.5% This is up from 3%. FHA has taken many losses from home loans with buyers having little or no money down . Up until October of 2008 buyers could have the sellers pay their closing costs and gift the buyers the down payment. Buyers could actually buy a house with less money out of their pocket then they could moving into an apartment. FHA felt that this was a major problem and stopped sellers from funding the buyers down payments and now FHA has increased the down payment requirement to 3.5%.

Many in the mortgage and real estate business thought this might limit the ability for new home buyers to qualify for a home. In my experience this is not the case. I have seen many first time home buyers who do not have the 3% or 3.5% down payment to use other resources to get into homes. FHA allows buyers to receive a gift form a family member or close friend, their church, or employer. In Pima county we have the Pima County Bond Loan that is 100% financing. See 100% Financing for more details. Nova Home Loans also has the Arizona Home Buyers Solutions for home buyers in Arizona. See 100% Financing.
Most buyers who do not have the down payment saved have been receiving gifts from family members. FHA feels this is a better than the seller giving the down payment because buyers will feel more responsible for the home when they know a family has invested in the home for them. When home buyers used the sellers money form down payment there was less of a feeling of responsibility for the property was easier to walk away from the property if there was trouble making the mortgage payments.

There are many ways for home buyers to get loans with little or no money down. There are HUD Repo programs that allow for buyers to only put down $100. USDA 102% home loans and VA do not require a down payment. Please talk to an experienced loan officer if you do not have the money saved for a down payment or you don't think you will qualify for a home loans. There are many solutions for you.