This program is back and currently approved for a limited time. Starting 10/19/2011  and continuing for a 12 month period.  FHA has made this  $100.00 down payment program available for Owner Occupant buyers using and FHA loan.

The requirements for this incentive are:

• Buyer must be an owner occupant utilizing FHA-insured financing

• The offer must be a full price offer  (reflecting the current list price)

One caveat is that the loan amount cannot exceed the full list price; therefore, a sufficient amount needed to cover upfront MIP must either be paid by the buyer or you can ask HUD to cover it as closing cost.  There is a place on the HUD contract to request this assistance.

The $100 down program has been a popular program for first-time home buyers but it was discontinued in December of 2010.  HUD/FHA offers this and other sale incentives on a state by state basis.  So this has just been re-implemented for Colorado HUD homes in October 2011. Purchasing a HUD home might be the best choice for a first time home buyer with limited funds available for down payment and closing costs.

FHA loans currently offer the lowest down payment requirement, normally 3.5%,  of any 30 year fixed rate loan.  FHA generally has a lower credit score requirement too. Because of these two minimums they do require that the buyer pay a monthly mortgage insurance premium that is rolled into your mortgage payment.  Talk to a lender about how this changes your payment.

HUD homes are foreclosed properties that were financed with a FHA-insured Mortgage.HUD becomes the owner of the property and turns it around and offers it for sale to recover the loss on the foreclosure claim.

The purchase process is a little different for these HUD homes and HUD requires that buyers work with a licensed real estate agent to make the offer and guide the process through closing. Contact me if you are interested in finding out more about purchasing a HUD home and about the $100 down program.