Home Loan Information Home Loan Information From A Former Industry Insider

The Truth Is In Here: 100% Financing Is Available in 2008

My friend Lane Bailey visited me for lunch yesterday and said, “Ken, I know you tell people 100% loans are available and I know a lot of people have expired listings or are trying to sell by owner but everyone is terrified and skeptical. Is it not true that you can finance (home sales) at 100% with no down payment?”

Lane gets it. The fear is big and mostly unwarranted. Buyer’s need homes whether they are up-sizing, downsizing, transferring or adding to the investment portfolio. So here are the conditions:

1. This is a 95% first at Fannie Mae rates and qualification guidelines with a 5% (actually can go to 8%) conforming bank second. Everything is disclosed to all lenders prior to loan approval.

2. This is for owner-occupied single-family residences in Georgia or Florida only. No investments, no second homes, no multi-family properties. Must be stick built or modular only.

3. This is for full doc borrowers only who can demonstrate income and assets with certified verifications performed by the lender including the 4506T for income tax return verification from the IRS.

4. Purchase price maximum is $437,850 give or take a few thousand. The FNMA portion of the loan is limited to $417,000 in most parts of the metropolitan areas of Georgia and Florida and you can finance an additional 5% on top of that.

5. The property must be in MOVE IN CONDITION – no repairs are allowed.

6. Appraisal must be satisfactory by a lender approved, licensed appraiser.

7. Buyer must have a minimum of 90 days of reserves that are sourced and seasoned for 2 months. This means you must have had them for at least 60 days and you must be able to prove where they came from. Savings, checking, 401(k), CD, etc.

8. Minimum loan amount is $120,000

9. Minimum credit score is 680 (with stronger income and lower debt ratio or more reserves may be able to go as low as 640 but if you don’t make 5 times your house payment or have a minimum of 12 months of payment reserves chances are you will need a 680 middle score).

10. Call with your questions before you assume you are going to qualify and that the home is going to qualify. This will not work on rural properties for example. (We have other 100% options for rural property mortgages.)

And to the nay-sayers who say you do not deserve a home if you cannot make a 20% down payment let me give this very real life scenario:

Clients owned a property in Clayton County for several years. They refinanced a few years ago to take out cash to do some upgrades, pay down some high interest debt and help a child. They left 20% in equity in their home at the time of their refinance in 2005. Since then Clayton County has lost their school accreditation, suffered hundreds of foreclosures and now job losses. Property values there are “in the tank”. These people have spent much of their savings helping a child through a situation. The employed spouse has great credit, in the 700′s, and a good debt-to-income ratio. They are having to sell and move into a smaller, single story home, due to health issues with the relatively young non-working spouse. They have found a home in the $160,000 range which is perfect for them and they can easily afford the payments. Unfortunately to sell their existing home they must take $35,000 to the closing table because the sales price is $35,000 less than the pay-off (no, the lender will NOT approve a short sale). This will leave them with roughly $8000 in the bank. They have NEVER missed a payment on anything on the buyer’s credit. Perfect payment history – never a late, no collections, no charge-offs, no judgements, no liens.

These people deserve a 100% loan. So hush. Call 678-946-0100 or 1-866-046-0120 to qualify. We work with agents whether independent or associated. No, your lender probably cannot do this loan and will probably tell you we cannot either. They are wrong.