Understanding FHA down payments and loan caps

[avv7c0]

Can someone clarify for me how down payment amounts play into the cap amount for my area? My county lists $353,750. Does that mean I can purchase/ build a house with a purchase price in the $370,000 range with 5% down bringing the amount borrowed below the $353,750 cap? Or is that the max purchase price?

Also, if the builder has committed to paying ALL of my closing costs, are initial interest payment, upfront PMI, etc. included in that? If not, I assume those can't be rolled up into the loan. Just doing some number crunching. Thanks!

[ShanetheMortgageMan]

It means the base loan amount, before the upfront mortgage insurance premium, cannot be any more than $353,750.  If you are just looking to put down the minimum 3.5%, that means your sales price would have to be no higher than $372,368... as $353,750 is 96.5% of that figure.

To your second question, it depends on what the builder is defining as "closing costs", you should ask for a breakdown.  They will also need to specify a dollar amount or % of the sales price as the credit in order for the loan to be underwritten.  The upfront MI can be financed into the loan though, it usually is for FHA.