Approved for FHA but not USDA

[homeinfuture]

I am working with a local builder in Central Florida. I was trying for a USDA loan however they informed me that my scores would have to rise well above the current mid score of 601 or I would have to pay the 2 unpaid charge offs that i have listed on my reports, However they can approve me right now for a FHA loan which requires 3.5 % down, I really do not have the time to wait to get my scores up to 660 nor do I have the 20,000 to pay the charge offs.

I can however get the 3.5% down due to by the time the home is built and time for closing it will be income tax time. 

My question is with the Closing costs, Can they be rolled into the mortgage or should I negotiate with the builder to pay them (I am using one of their preferred lenders) 

Also are their any hidden costs that are due at closing? 

The lender said with my income I was not eligiable for down payment assistance. Is he correct I made 52K last year and have a wife and 3 kids under 18. The price of home is around $164,000

[justrock]

The costs seem to vary wildly from state to state.  I'm in New York, and they are a bloody fortune.  I believe FHA allows for 6% of homes purchase price as a seller concession towards closing costs.  You will also have pre-paids for your escrow account- taxes, PMI, insurance.  I think you still need a home inspection even for new construction.  That you pay for yourself before closing.  You probably won't need a survey, your builder should have that.    Your lender can help you figure it out very quickly.

[Anonymous]

I am in a similar position.   My credit score is almost a 600.  Which lender did you use?