FHA 3.5 Downpayment Effective 1/1/09

Effective January 1, 2009 on all new FHA case number assignment on purchase transaction will require a down payment of 3.5 percentages. Summary of the Memo Purchases Borrower will be required to have paid a down payment in cash or its equivalent (Grant, Bond, Government Funded 2nd Liens) an amount equal to 3.5 percent of the lesser of the Sales Price or the Appraised Value (No longer closing cost may be consider in the down payment calculation.) Seller Concession exceeding 6% of the sales price and/or inducements to purchase (Gift Card, Refrigerator, Car, etc.) must be subtracted form the lesser of the Sales Price or the Appraised Value before calculating the 3.5 percent down payment