Downpayments Are Overated With Home In Five Advantage

Downpayments Are Overated With Home In Five Advantage

Who needs a down payment?

Nobody.. well, almost nobody.

There are two deciding factors when it comes to renting a home verse buying a home.   Nobody rents if they have the credit and the down payment to do so.  But unfortunately, most people don’t realize they don’t need the down payment.  Credit is another story for another article, because that’s an easy fix too.  But for now, let’s discuss a great program that allows for no down payment in the Maricopa County area.

The Home in Five program is becoming more and more popular although it is still very unknown to most of the community.  But it does allow a consumer to purchase a property with no down payment.

The fact that it’s dubbed as a no down payment loan is actually misleading.  There is a down payment being made, the Buyer simply isn’t the one making it (free money doesn’t suck).  The down payment comes in the form of a grant from the IDA (Industries Development Authorities).  This is then packaged into a standard FHA loan for the Buyer to move into a home that they own, with no down payment.

So why would anyone rent if this is an option?  Consider this.  When you rent a home, it usually takes first and last month’s rent to move in, plus applicable application fees and other potential deposits.  On a $150K home, that could be upwards of $3K or more.  But most think that is cheaper than the costs to buy that same home.  The minimum down payment according to FHA is 3.5%,  ($5250.00) plus additional closing costs.  To some, that seems like too much.  Until the Home in Five Advantage loan was rolled out.

Now consider that some home but that same Consumer is buying it.  With Home in Five, the down payment is being made for them, and with a little help from the Seller on closing costs, the same home costs the Buyer nothing to move into.  And, coupled with that, the first payment is not due for up to 60 days later.  So a person can move into a home without a dime out of pocket and then still not make a payment for up to 60 days.  Why rent?  I can’t answer that question unfortunately.

There are a few things to consider about the Home in Five.  It’s a standard FHA loan but it does have a few additional restrictions outlined here.
· Available only on a 30 year fixed
· Available only for a single-family home (no condos or manufactured homes)
· Home must be professionally inspected (cannot do a self-inspection)
· Minimum FICO score of 640 is required
· Debt ratios are capped out at 45% (compared to 55%+ for regular FHA)
· Total income cannot exceed $88,000 for Borrower’s on the loan
· Buyer must attend a home buyer’s education course (online available)

There are always other things to consider when deciding which loan is best for you.  And just because the Home in Five loan sounds great, doesn’t always mean it’s the best loan for everyone.

To apply for this loan or get more information, just visit  It’s actually one of the easier loans to qualify for.

Mike Kortas

Senior Loan Officer
Team Line: 602.688.4946
Cell: 480.228.5442

Download your free mortgage app & calculator: CLICK HERE

Edna Montijo - Owner Headshot
Phone: 480-999-1156
Dated: May 6th 2014
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AZ Xceptional Realty
2450 S Gilbert Rd #206
Chandler, AZ