FHA Purchase and reserves

[jetsfan2013]

For those who have recently closed using FHA, how many months of reserves did you need prior to purchase? I have heard conflicting information over the past few days ranging from 2 months to 6 months.

[Anonymous]

That is going to be super lender specific. Personally my lender had no specific reserves requirement.

[Anonymous]

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@jetsfan2013 wrote:

For those who have recently closed using FHA, how many months of reserves did you need prior to purchase? I have heard conflicting information over the past few days ranging from 2 months to 6 months.

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My lender does not require any reserves for FHA loans. We are also pulling from our 401K for the 3.5% down payment and our lender advised maybe taking more if we wanted to use it for furniture, moving expenses, and other costs. 

If we were going the conventional route, we were told that the down payment would be 3% and we would have to have at least 2 months of the mortgage payment showing as reserves in our bank account. 

[Anonymous]

Our lender said one month 

[jetsfan2013]

Very interesting, I was unaware although the product (FHA) each lender could have such a large variance re: reserves. I spoke with a friend a moment ago and he and his wife are closing on their first home at the end of June. He said his lender advised needing 1 month. He was getting his downpayment from the sale of a spare car they no longer needed.

[Anonymous]

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@jetsfan2013 wrote:

Very interesting, I was unaware although the product (FHA) each lender could have such a large variance re: reserves. I spoke with a friend a moment ago and he and his wife are closing on their first home at the end of June. He said his lender advised needing 1 month. He was getting his downpayment from the sale of a spare car they no longer needed.

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Things like that tend to be lender overlays, which are additional requirements lenders will have in order to get you approved. Google the FHA Guidelines and you can learn a lot about what is actually required for FHA. From my interpretation on the FHA Guidelines, there are many resources you could use to get your down payment and having the cushion aka reserves is not necessary at all.