FHA Home Loans require a 3.5% downpayment. There are not requirements that you purchase in a specific spot (like there are for USDA Home Loans) and you do not have to be a Veteran (like VA Homes Loans), but again, FHA requires you make a 3.5% downpayment.
If you want to use your 401K Account to access the money for your downpayment consider this:
401K Funds
With FHA, you can use 401K funds in the form of a loan or a withdrawal for required funds to close. We also use them quite often to simply document reserves with no intent to withdraw the funds. It can sometimes make a difference if your debt-to-income ratio is a little higher than the guidelines. If we use 401K funds for either source of funds to close or for reserves we still need to obtain proof of the terms under which funds may be withdrawn. Like the bank statements, provide all pages of the most recent statement that clearly shows your name, employer, statement period, any outstanding loans you have, vested balance, and the specific type of assets held in the account. I know this may sound like common sense but you would not believe how many people have sent me just a screen print snapshot from accessing their account online that has nothing on it to clearly identify who it belongs to.
When withdrawing funds to close, the proceeds check must evidence sufficient net proceeds (after penalty for early withdrawal and federal taxation) to close the loan when combined with other verified liquid assets.
When borrowing against an employment savings plan, a copy of the loan agreement and proceeds check are required. Also, it is important to note that loans against 401k or similar employment savings plans are not counted as an obligation in calculating debt ratio for an FHA loan
If you have questions about purchasing a home in Cary, NC using the FHA Mortgage Loan Program, please call Steve and Eleanor Thorne, Mortgage Planners, Cary, NC 919-649-5058. We have the Best Mortgage Rates!
Thank you so much, Great information… You keep writing and I’ll keep reading.