FHA-Required Funds

[Anonymous]

I don't think I've ever felt both happy and sad at the same time but DH just got a raise at his job. Any other time, this would've been great news but in trying to qualify for USDA, it's a real problem. His income has put us nearly $1000 over the qualifying limit so unfortunately the money we've saved will have to go toward this purchase. The purchase price of our home is $125,000 and we'll be paying 3.5% with FHA. I'm wondering whether we will be required to have downpayment costs and closing costs saved up in order to qualify. The seller is paying $4300 in closing costs but does FHA still look for both downpayment and closing funds in my account? Please help!!! Thanks in advance.

[Anonymous]

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@Anonymous wrote:

I don't think I've ever felt both happy and sad at the same time but DH just got a raise at his job. Any other time, this would've been great news but in trying to qualify for USDA, it's a real problem. His income has put us nearly $1000 over the qualifying limit so unfortunately the money we've saved will have to go toward this purchase. The purchase price of our home is $125,000 and we'll be paying 3.5% with FHA. I'm wondering whether we will be required to have downpayment costs and closing costs saved up in order to qualify. The seller is paying $4300 in closing costs but does FHA still look for both downpayment and closing funds in my account? Please help!!! Thanks in advance.

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To qualify no but you will need to have it in either your savings or checking account for the underwriter to give you a clear to close.

[Anonymous]

Steelfan, thanks so much for your response. I'm hoping that the bank we're using is an exception to the rule because although we have our downpayment, the issues with our USDA qualification took us by storm. The money we'd saved was actually set aside for closing costs which we wouldn't have had to pay anyway because the seller has agreed to handle that portion. Since we've had to switch to FHA, I'm just left with so many questions and not nearly enough answers. Again, thanks for your help. If anyone else has more information, feel free to chime in at anytime. I would really appreciate it.

[cdtotten]

As long as your bank accounts show enough money to cover the down payment then you will be ok. Although little cash reserves is also a reason for UWs to worry and have issues. If you don't have cash reserves, they will be concerned about your ability to pay the loan.