An FHA borrower with a 580 credit score wants to purchase a home for $200,000. What is the minimum cash investment required from the borrower's own funds?
Correct Answer
A) $7,000
FHA requires a minimum 3.5% down payment for borrowers with credit scores of 580 or higher. With a $200,000 purchase price, the minimum down payment is $7,000 (3.5% × $200,000). This must come from the borrower's own funds, though gift funds are permitted for the down payment.
Why This Is the Correct Answer
FHA requires a minimum 3.5% down payment for borrowers with credit scores of 580 or higher. With a $200,000 purchase price, the minimum down payment is $7,000 (3.5% × $200,000). This must come from the borrower's own funds, though gift funds are permitted for the down payment.
More Mortgage Knowledge Questions
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A borrower asks about the difference between discount points and origination fees. What is the most accurate explanation?
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