FHA Down payment Question

[Anonymous]

I am currently renting and wondering if the security deposit that my landlord is holding of ours can be used towards our down payment? The security deposit is almost enough to cover the 3.5%.

Thank you!

[Anonymous]

No it can not.  There is no guarantee you will recieve it all back and even if you did, it would be too late to be used int he transaction.  The only way it would work is if you were buying a property from him and he allowed you to use theat money as down payment.

[DallasLoanGuy]

I disagree with Mickie.

Any funds you get back is YOUR money. To be used any way you want.

But Mickie makes a god point... about getting it all back and the timeliness.

[Anonymous]

I should have clarified. 

I am assuming that you will be living in your current rental until you purchase and buy.  It is highly unlikely that your landlord will release your deposit prior to you moving out so therefore that money would not be able to be used as a down payment.  That said, yes it is your money, but it is being contractually held by someone else as a deposit and until that contract is fulfilled the money, although yours, is unavailable to use for anything.  Although not impossible, getting a landlord to release a deposit prior to moving out usually only happens if you are friends with the landlord/etc and they fully trust you are not going to leave them high and dry.  It could be worth asking about though for sure.

In either case, for it to be used as a deposit, you have to have the funds available to you. 

[Anonymous]

I would be buying the home from my current landlord if he does agree to release funds at what point to I need to have the funds in my account?

Thanks guys for your help!

[DallasLoanGuy]

he doesn't need to release them to you. he can put them at the title company held in escrow.

do you have a realtor?

[DallasLoanGuy]

You will need to prove that you put that money down.

was there anything in writing?