We’ve been getting a lot of questions regarding FHA financing and our 5% down conventional program. We are one of a very few lenders that can offer 5% down conventional financing. I thought it would be a good idea to provide you with a short list of pros and cons for both loans.
FHA Pros
• Allows for higher debt to income ratios. In some cases up to 55%
• Allows for lower credit scores, down to 620
• Allows a borrower to put 3.5% down
• The entire down payment can be a gift
FHA Cons
• Condo buildings must be HUD approved.
• More documentation required from borrower
5% Conventional Pros
• Condo buildings do NOT have to be HUD approved
• Less documentation required
• No upfront mortgage insurance required
5% Conventional Cons
• Debt to income ratio must not be greater than 41%
• Down payment must come from borrowers own funds
• Must have at least a 680 FICO score
Guest blogger, Michael Poland, is a senior mortgage banker with Baird & Warner Financial Services in Baird & Warner’s Lincoln Park Office. Michael can be reached at 773.770.7524 or by email at michael.poland@bairdwarner.com.
Fran Bailey, Realtor
{ 1 comment… read it below or add one }
Hi Mike ~
Are there any condos in the River North area that would qualify for 5% down or FHA loans? Your immediate assistance is greatly appreciated. Thank you.
Kathy Giorgi