Passaic County
Board of REALTORS®
To Connect, To Educate, To Inspire

Help Clients Get Flexibility & Affordability in One Loan

Written by Sheetal Sawhney, CrossCountry Mortgage


How many of your clients are first-time homebuyers? With staggering rent costs nationwide, it’s no wonder more and more people are leaving the rent market to buy a home of their own. In many cases, a person could make mortgage payments for the same or less than what they’re paying in rent!

This is where FHA home financing comes in. This loan program provides the flexibility buyers need to purchase a home, particularly when it comes to the down payment. FHA loans require only 3.5% down — much less than the conventional 20%. Let’s do the math.

On a $200,000 home, a conventional down payment of 20% would be $40,000. Not many first-time buyers, particularly millennials who may be balancing student loan debt, have that kind of money saved up. With an FHA home loan, the down payment would be $7,000. A much more attainable figure for today’s young buyers.

The benefits don’t end there, though. FHA home loans also provide flexibility when it comes to qualification.

For example, many loans require higher credit scores, but a high score can be difficult to attain for a buyer who might not have an extensive credit history or who may have a fair amount of debt. FHA loans permit credit scores as low as 580 to take advantage of the 3.5% down benefit. For those with scores lower than 580, a 10% down payment is required.

FHA loans also allow parents or other relatives to be a co-applicant on the loan. This gives the buyer greater strength for qualification. Additionally, motivated sellers may be willing to assist your buyers with closing costs. FHA loans permit up to 6% seller concessions, which can help your buyer with these costs.

Finally, FHA loans can be combined with many types of down payment assistance programs. State housing agencies and other organizations may offer grants, second loans, and other forms of assistance that can be combined with an FHA loan to further assist your buyers in getting the financing they need to buy.

So, if you’re working with first-time buyers or those who simply need more flexible financing requirements, consider recommending FHA home financing to them. You’ll be doing your part to help them realize the American dream of homeownership.


Contact Sheetal Sawhney for more info.