Our 0% Down FHA Loan
We’re proud to offer Atlanta’s only 0% Down FHA Loan! Sure there are other Down Payment Assistance (DPA) loans in Atlanta, but most of the Down Payment Assistance comes from small non-profits, can take between 6 and 12 weeks to obtain, and are limited by income or area. Not ours! If you qualify for an FHA loan with us: you qualify for our 0% Down FHA Loan! Interested? Apply Now!
Some Important Details:
- This is structured as a standard (96.5%) FHA loan with a 3.5% second mortgage as the down payment.
- The second loan is funded and underwritten by the same lender at the same time as the first mortgage.
- No additional Debt-To-Income (DTI) restrictions.
- No area restrictions.
- No income restrictions.
- No First Time Homebuyer requirements.
- Max Purchase: $359,950
- Min. Credit: 660
- The second mortgage is a 10-year term with an 8% rate.
- This adds $42/month per $100,000 of house. For example: a $200,000 home would have a second mortgage of $7,000 with an additional payment of $84/month. That’s $50/month less than they’re paying in PMI.
- Like all FHA loans, this loan allows up to 6% in seller concessions, so it’s possible to bring $0 to the closing table!
- ATL Mortgage still pays for your appraisal.
- We still charge no underwriting fee, processing fee, or credit report fee. (Borrow liable for any discount points, obviously).
- We close these in 24-28 days.
- Gift funds are eligible to cover closing costs!
Why choose a 0% Down FHA Loan?
A 0% Down FHA Loan can be useful for a lot of reasons, but it’s obviously wise to be careful. If you have a medium- to high-paying job and you’ve just finished paying down debt, or if you’ve just finished school, it can make sense to go ahead and get the ball rolling on homeownership.
Some things to watch out for:
Your down payment will be coming in the form of a second loan. That loan is very small, but the interest rate is a substantial 8%. That means that for every $100,000 of house, you payment will go up $42/month to a maximum of $151/month if you buy a home at the maximum mortgage amount ($359,950). It’s not a lot, but it is definitely worth taking into account. It is generally about 30% lower than your PMI payment on your FHA loan, so you can basically count it as a second, smaller PMI payment.
How Do I Ensure Bringing $0 To Closing?
As with any FHA Loan, our 0% Down FHA Loan allows a maximum of 6% in “seller concessions.” Seller concessions are basically the seller covering some of your closing costs. On a $200,000 house, a seller can cover up to $12,000 in closing costs! Just a note: if you have $12,000 in closing costs you should probably run away from whatever insane lender you’re working with and give ATL Mortgage a call.
During the negotiation process you can work with your Real Estate Agent to negotiate as much as you can from the seller in terms of closing costs. If you need a great agent, we have a list of the 4 best agents in Atlanta!
Curious about our FHA 203K Loan? Click here!