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Hello Everyone! Need some loan advice!

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AndrewAndrewAndrew
Valued Member

Hello Everyone! Need some loan advice!

My parents want to sell me their house. Zillow currently says it is worth $130,000, but they will sell it to me for $100,000. I would be a first-time home buyer. Can i still purchase this home with the FHA loan?

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ShanetheMortgageMan
Super Contributor

Re: Hello Everyone! Need some loan advice!

Yup, you can buy the home from your parents.  The maximum loan-to-value would be 85%, or if you've been a tenant in the property for the past 6 months then you could get an FHA loan up to 96.5% (see 2.C. in the below link)

 

http://www.fhaoutreach.gov/FHAHandbook/prod/infomap.asp?address=4155-1.2.B.2

 

On a purchase, the value is the lower of the purchase price of the appraised value.

 

If you haven't been a tenant in the home for the past 6 months, then you'd need to put 15% down.  If you don't have 15% to put down, and since the home is worth $130,000 (Zillow isn't the most accurate FYI), you could buy the home for $118k and your parents could gift you 15% ($17,700) of it's equity, so you'd only have to obtain a mortgage for $100,300.

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