Items Tagged with 'borrower minimum required investment'

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  • Ask the Underwriter: Can the borrower’s cash to close be less than the FHA minimum required investment amount?

    There's a loophole
    Ask any mortgage professional and they will tell you if you use an FHA loan to buy a new home, you must make a Minimum Required Investment equal to 3.5% of the purchase price or appraised home value (whichever is less). Most of these "experts" will also tell you this means the minimum down payment and cash due from the borrower at closing must be equal to 3.5%, and they will insist your out-of-pocket cost cannot be any less. And this misconception is so widely believed that it caused a bit of panic in my office this week. Read on to find out about how a little loophole helps avoid this problem...
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