FHA Idenity of Interest

gaylemhNovember 1, 2010

Can someone please explain this to me.

My daughter wants to purchase my primary residence. She doesn't live in the house. I had it listed with the real estate agent for 6 months, but it didn't sell. I told my daughter I would sell it to her, but all she qualifies for is a FHA loan. I see different information on line about it, some sites say they will only aprove 85% of the value. Other sites say that as long as it's going to be a primary residence you can still close with 3.5%.

Does anyone know exactly what the rules are with this? I'd like to know if she would be able to buy with 3.5 down, before we get the lawyers involved, and have to pay lawyer fees, and not be able to purchase the house.

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terriks

Talk to a loan officer.

    Bookmark   November 1, 2010 at 10:50PM
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greenbank

Typically, you can qualify for 3.5% under certain conditions; but in addition to your daughter's ceiling for the amount she can borrow, the FHA will have a ceiling for the county (typically) the home is in. They may also have a minimum down payment limit based on the market you're selling in.

In my county, the maximum FHA mortgage is 385K. If your house was in my county and priced at 350K (and your daughter's income supported the monthlies and other qualifications), she could probably buy with 3.5% down. However, if your house was $500K, she would need to come up with at least $115K down to make up the difference between the FHA max and your selling price (again, assuming her income would support a $385K mortgage).

This is all easily answered by calling a mortgage broker.

    Bookmark   November 2, 2010 at 6:43AM
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