Expert: Dick Dennis - 9/19/2009

Question
Is it normal to obtain 100% financing through FHA?  I thought they only covered 80% and a down payment was required to cover the rest.

Answer
No, Mike, but then these are not normal times. The economy and the politicians have dictated more lenient terms. Normally, FHA has required 3% down. Now normal means half a percent down. There are certain requirements, but it depends on your area and your credit. And you need enough for closing costs. But you can use money that is lent to you by relatives.

If you are looking for a mortgage with 100% financing, try talking to your bank. You may qualify if your score is particularly good, and you are not living in a declining market area. Nevertheless, banks and private lending companies are the place to search for a 100% financing loan. Try the internet, a credit union or a mortgage banker. They may have a 100% financing mortgage loan product for you. However, looking for pure FHA 100% financing is not an adequate option - it is possible if you use some additional funding from other sources.

Dick Dennis