97 Percent Home Mortgage Loans
a 97 Percent Financing Florida Mortgage
or call us at 808-357-5326
Home Buyer 97% Home Mortgage Loans
The Community Home Buyer
(CHB) 97 is a conventional fixed rate home loan that is designed
to assist first time home buyers with flexible mortgage qualifying
terms. The loan is a fixed rate mortgage in which the monthly payments
remain the same over the life of the loan. Once the mortgage is
in effect, the interest rate does not fluctuate but remains constant.
The 30 year fixed rate
loan is one of the most commonly used mortgages for residential
financing in America. The greatest advantage for a home buyer is
the predictability of the payments each month because it never changes.
This type of loan is often recommended for home buyers living on
a fixed income, a set budget, or those planning on living in their
home for more than five years. If interest rates increase, the loan
rate will remain the same. Unfortunately should rates decline below
the set interest rate on the loan, the only way to change it is
to refinance the mortgage.
The major difference
between the CHB 97 and other conventional home loans is the reserve
requirement. The CHB 97 only requires a 1 month cash reserve. Also,
the CHB 97 limits the borrower's income to 100% of the median income
for the area.
The following are
highlights of the Florida 97 Percent Home Mortgage Loans program:
Down Payment Requirements:
The minimum down payment required for this type of loan is 3% of
the sales price for owner-occupied properties only.
Income and employment:
The borrower's income is limited to 100% of the median income for
the area. As for employment, there are no limitations on a specific
length of time at a particular job. However, a 2 year history is
required, preferably in the same line of work (education can be
counted towards this 2 year history if it is for the same profession
the borrower is currently in).
and occupancy requirements: Single family attached and detached
homes, 2 to 4 unit properties, planned urban developments (PUDs),
and Fannie Mae or Freddie Mac approved condominiums. Second homes
and investment properties are not eligible under this program.
Closing costs and prepaids may be paid by interested parties (i.e.
seller) as long as they are considered in the contribution limitation.
For primary residences, the seller may contribute up to 3% of the
sales price if the buyer is putting less than 10% down. If the buyer
is putting 10% or more down, the seller may contribute up to 6%
of the closings costs.
This type of loan is not assumable.
The borrower is required to have a minimum of one month cash reserves
in the bank by the close of escrow.
Gift Funds: Gifts
are allowed from a relative, church, municipality, or a nonprofit
Generally Fannie Mae and Freddie Mac require a minimum credit score
Co-Borrowers): Not allowed.
Fannie Mae and Freddie Mac limit a borrower's monthly payment
not to exceed 28% of their gross monthly income. A borrower's total
debt (proposed monthly payment plus monthly payments towards credit
cards, student loans, car payments, and other installment and revolving
credit) cannot exceed 36% of their gross monthly income. If compensating
factors are present or if the borrower has an above average credit
score, the stated ratios may be exceeded.
Required for all purchases with a down payment less than 20% of
the purchase price.