FHA 203(b)

FHA program which provides mortgage insurance to protect lenders from default; used to finance the purchase of new or existing one- to four family housing; characterized by low down payment, flexible qualifying guidelines, limited fees, and a limit on maximum loan amount.

FHA loans are a wonderful tool for first time homebuyers as well as buyers with limited credit, or down payments. The FHA 203b program allows for a 3% down payment which can be from flexible sources such as gift funds from family members, employers as well as non- profit organizations.

If you are purchasing a condo you will not have an upfront mortgage insurance premium like you would normally have with the program.

The FHA 203(b) allows for a non-occupant co-borrower to help one qualify for the purchase of a home. The non-occupant co-borrower's income can help you qualify for a purchase and this is a great way for someone's parents or close friend to help them purchase their first home.

The FHA 203(b) allows for multi-unit, owner occupied properties to be purchased for as little as 3% down. The FHA 203(b) program also allows for a maximum seller concession of 6%. On a 3-4 unit loan, the buyer must have 3 months mortgage payments in rerserves after closing.

FHA 203b or 203(b) financing refers to FHA loan section 203(b), and is the most popular FHA program to purchase single family, duplex, 3 family and 4 unit homes.

» DISCLAIMER: The information contained in this article on 'FHA 203(b)' is a collection of contributions by licensed mortgage professionals and is not the opinion of Broker Outpost LLC. Always consult a licensed professional before applying for a mortgage.