Jul
27

Low Down Payment Programs Still Available for Certain Chicago Home Buyers

July 27, 2010

The

Equifax Personal Finance Blog gives information and links for two types of programs that do not require the higher down payments that have become typical in today’s market. Most lenders are requiring at least 5 percent down, but loans are still out there for $100 or even zero down.

Real estate expert Ilyce Glink talks about changes in the down payment environment in her article, “

Debt-to-Equity Ratios Rising: Unless You Get FHA’s $100 Down Payment Incentive, You’ll Need a Bigger Down Payment.”  Because lenders want to reduce the likelihood of buyers walking away from their loans, they’re typically requiring 5 percent down for buyers who plan to live in their homes and 30 to 40 percent down for investors. FHA has increased down payment requirements from 3 percent to 3.5 percent for typical home buyers.

However, there is good news. FHA also offers a $100 Down Payment Incentive on certain Department of Housing and Urban Development (HUD) homes. This is good for buyers or investors. FHA will pay closing costs of up to 3 percent of the sales price. The brokers who make these deals get a $500 fee plus their commissions. Plus, there’s an extra $1,000 for the buyer if the home sells within 30 days of its original listing date.

The second program mentioned in the

Equifax Personal Finance Blog article is the USDA Rural Development zero-down loan.  Although these loans have “rural” in their name, you may be surprised at some of the locations that qualify, so it may be worth checking out. The buyer’s income may not exceed certain thresholds, further limiting the number of home buyers who will qualify.

For buyers who must come up with the larger down payments plus closing costs, there is still good news. A higher down payment now means lower monthly payments for the next 30 years or so. And with today’s low interest rates, you may see a mortgage payment lower than you would have ever expected. Paying more money up front now means more in your pocket later. You’ve got to like that!

About The Author

Read All Stories By Carol Morgan

Carol Flammer is a public relations and social media marketing expert, strategist and consultant. With 20 years of experience, Carol has established herself as the “go to” for real estate and construction products public relations and social media. Carol is president of Flammer Relations, Inc., and managing partner of mRELEVANCE, LLC, a Marketing, Communication, Interactive agency with offices in Atlanta and Chicago.

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