$100 Down Payment Buys a Home

Down payment program is available to owner occupants using FHA financing to purchase a HUD home. On a qualified FHA loan you can purchase a home with a Down Payment as little as $100. The following are answers to questions on what qualifies:

1.    Are all HUD properties eligible for this incentive?
No, only HUD properties that qualify for FHA insured (or insured with escrow) financing are eligible for this incentive. FHA Uninsurable properties no not qualify [unless using 302(k) financing – see #6].
2.    Is the $100 down-payment incentive available in investor buyers?
No. The $100 down-payment option is available for owner occupant FHA buyers only.
3.    Is the $100 down payment incentive available for nonprofits or the Good Neighbor Next Door (GNND) program?
No. Nonprofit organizations and GNND program properties have established discounts that are already in place. This incentive is not available for use by nonprofits or GNND.
4.    Does the type of financing impact whether or not the buyer can take advantage of the $100 down payment incentive?
Yes. The $100 down-payment incentive is available only to owner occupant buyers that choose to use FHA financing to purchase their home.
5.    Can a buyer switch to this program once already starting with conventional financing?
Yes. So long as the property meets the eligibility requirements for the incentive, buyers can change financing and still take advantage of the $100 down-payment incentive.
6.    If the buyer uses FHA 203(k) financing (a rehab loan) to purchase a home, can they take advantage of the $100 down-payment incentive?
Yes. Please be aware that the 203(k) program may be used only on properties that are listed as Uninsurable (UI) and that are qualified for 203(k). However, FHA also offers a financing option designated “Streamline 203(k)” that can be used on properties listed Insured (IN) or Insured with Escrow (IE).
7.    Will the use of the $100 down-payment incentive impact the NET sales price?
No. Using the $100 down-payment incentive has no bearing on the calculation of the NET sales price.
8.    The buyer has bid over the appraised value; can they still buy the home for $100 down?
No. FHA guidelines require that the buyers still have to bring in the “overbid amount” in the form of cash as part of the down-payment. Obtaining a second appraisal to justify the overbid to receive the $100 down-payment incentive is NOT allowed.
9.    How long will this incentive program last?
At this time, HUD has not published the length that this incentive program will be in effect.