Charlotte NC Real Estate - Mortage Update

Freddie Mac has just announced that they are discontinuing all 100% financing options. Although Fannie Mae still offers a few, the prices have gotten higher and the consensus among industry leaders is that they will probably discontinue their 100% programs soon. Did people even buy homes before 100% financing??? (I'm kidding, of course!) The 100% financing craze has actually not been around that long, and although younger people see it as the norm, many older consumers have always thought of it as a little too loose.


Whether you like 100% financing or not, many consumers don't have very much money to put down. There will definitely be a gap left if all the conventional programs abandon 100% financing. Enter FHA. FHA stands for the Federal Housing Administration and has come to be known for helping first time homebuyers, but FHA is not a one trick pony. Although many first timers use the program, it is not restricted for first time homebuyers. There are no income limits either, but one factor has kept FHA looked at as a lower end program... loan limits.

FHA loan limits still exist, but they have been drastically changed. The new FHA loan limit for the Charlotte Metro area is $303,750. This limit change is temporary but when it expires the new limit will still be respectable $230,000.

FHA makes 100% financing possible through the allowance of gift funds. There are non-profit organizations that will cover the down payment for the homebuyer. The largest of these programs is called The Nehemiah Program. This program provides gift funds that can cover the down payment requirement for FHA loans. The seller is then required to make a donation of at least the same amount along with a processing fee of $499.00. You can learn more about The Nehemiah Program by visiting www.getdownpayment.com.

FHA is really an outstanding program for homebuyers with a limited amount saved for down payment. FHA only requires the buyer to have 3% of the sales price invested into the transaction. That would be $7050.00 for a $235,000 home, and the average FHA interest rate right now is between 6.25-6.5%. These rates would be for a 30 year fixed mortgage!


If you would like more information about FHA financing, please email me at olan@myersparkmortgage.com.


Olan Carder

Myers Park Mortgage

Olan is a long time lending partner and trusted advisor. Interested in a Charlotte Home?  Search Charlotte Homes~ by area

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