If you live in Virginia, the Virginia Development Housing Authority (VHDA) has a program called an FHA Plus loan that will allow you to finance up to 101.5% of the purchase price of a home.
Here’s how it works: you get a 1st mortgage for 96.5% of the purchase price and then you get a second mortgage for either 3.5% (qualified borrowers with credit scores ranging from 620-679) or a second mortgage for 5% (qualified borrowers with credit scores above a 680). If you qualify for the second loan of 5%, that means the extra 1.5% leftover will be applied to your closing costs. Here’s an example from a client scenario I worked up yesterday:
|2nd Mortgage (3.5%)||
|Total Down Payment||
|1.5% from 2nd Loan||
|Seller Paid Closing Costs||
|Total Cash to Close||
Here’s a breakdown of what that payment would look like based on today’s par interest rate from VHDA of 3.375% (apr 3.488):
|Estimated Taxes and Insurance||$304.05|
|Estimated Monthly Payment||$965.53|
For program details and eligibility requirements, visit VHDA’s website. If you live in Virginia and would like to see if you qualify for a VHDA Plus loan, please contact me for a free personalized mortgage analysis.