appraisal value question

[Peter1142]

For FHA loans, assuming no seller's concession, does the appraised value need to be higher than the loan amount or loan amount + 3.5% down payment... I.e. if the appraisal is for 245000, what is the maximum sale price I can offer with 3.5% down assuming no sellers concession and financed UFMIP?

[ShanetheMortgageMan]

If you don't want to put any more than 3.5% down, then the appraisal needs to at least come in at the purchase price.  On a puchase, FHA loan amounts go to 96.5% of the lower of the purchase price or appraised value, before the UFMIP is rolled in.  In your example, it'd need to appraise at $245k if you just want to put down $8,575 (3.5% of $245k).

[Peter1142]

Got it, thanks Shane... the down payment doesn't count because it is the minimum.