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Cash reserves?

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JMMD
Frequent Contributor

Cash reserves?

I have been told  that for FHA we can use 60% of our 401K towards reserves. We have plenty in there to cover that. My question is can we use all of that 401K ( 60%) as reserves or do we need actual CASH in hand plus 401K? For example,  if they are asking for 6 months of reserves which would = $12,000; Could all of that $12,000 be 401K?

 

 I am trying to figure out how much cash in hand we will need in order to close, counting all closing cost and reserves.

 

Thanks!

Jean

Message 1 of 3
2 REPLIES 2
Anonymous
Not applicable

Re: Cash reserves?

Yes, you can use your 401k and that can cover all of your reserves. You may need to show terms and eligibility to prove liquidity.

Message 2 of 3
JMMD
Frequent Contributor

Re: Cash reserves?


@Anonymous wrote:

Yes, you can use your 401k and that can cover all of your reserves. You may need to show terms and eligibility to prove liquidity.


Great to know! Thanks!

Message 3 of 3
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