Down payment is determined by three factors: age of the youngest borrower, the purchase price of the home, and current interest rate.

No, you are allowed to be on title to both homes. You can rent your existing home for cash flow or sell it after you move into your new home. The only disqualifying issue would be if your current home has a FHA mortgage balance. This would require you to refinance into a non-FHA mortgage or sell your home before using the LHL Program. If you own other real estate then your income will need to support the PITI (principal, interest, taxes, and insurance) on existing real estate as well as the property taxes, insurance, and/or condo dues on your new LHL property. After all real estate expenses, installment, and revolving debt is subtracted from income, there must be residual income remaining. This is based on the area you live in and if you are single/married. All items will be verified.

The most important thing you need to know is seller concessions or paid closing costs are permitted up to 6% of the purchase price. IMPORTANT: if you’re working with a builder and they are providing incentives, then a simple purchase price addendum can be created. A reputable lender will know what form you will need.

All new construction may require a Certificate of Occupancy (CO) once the home has been inspected and it’s determined to be move-in ready. The CO also needs to be issued before closing. The first step is to get a Pre-Approval letter (LHL Golden Ticket) from us prior to going into a contract with the builder. Please make sure to get us in touch with the builder so we can verify everything needed in the contract.

No, this is not a tax-payer-funded program. Everyone that secures a FHA insured mortgage contributes to the Mutual Mortgage Insurance fund. In the case of regular (non LHL) FHA mortgage-insured loans, the borrower contributes part of their monthly payment to the fund. With the LHL Program, the lender pays FHA 0.5% of the loan balance per year (accrues onto loan balance) which creates a continuous stream of dollars into the insurance fund. The benefit of the LHL is that it is FHA-insured which means you or your heirs are NEVER Personally Liable for this debt.

The LHL is a home buying program for those with good credit and enough liquid assets to satisfy the down payment of about 65% of the purchase price, and also have enough left over to comfortably pay for taxes, insurance, and HOA fees. Income, assets, and payment history will need to be verified before pre-approval letter is provided.