Fannie Mae financing, is it a good deal like it says in some listings?

Sometimes you see a listing that says, Fannie Mae property, only 3% down. Is that really true? Well, I called a whole bunch of banks, wanting that deal, and found out a few things:
1) Most banks don't do Fannie May
2) A lot of the ones that do want 20% down, they say it's not worth their time
3) A lot of banks that do Fannie May will have a minimum loan amount, such as $50,000 or $75,000, so if you're looking at a cheap Fannie Mae condo listed at $40,000 no one would bother lending on it
4) I was recently referred to a Fannie Mae lender, and the banker I talked to was such a stickler for rules and so dense, she disqualified me for a $55,000 townhouse, where as I am pre-qualified by a few banks to buy something up to $80,000 FHA. She thought a payment of $550 a month was too high for my income, where as Bank of America or Banner bank, for example, would easily let me go up to a $650/mo payment.
So, to summarize in plain English: Fannie Mae 3% down is a mystical pot at the end of the rainbow that you can chase forever and never get.

Buying a HUD home demistified

To buy a HUD home you need to get an agent who is approved to do HUD. The agent submits your bid on the computer. HUD has been greedy and hasn't taken full price offers right away, but waited to see if they'd get a more than full price offer. So you might submit a bid and not hear from HUD if you win the bid until the end of the bidding period. To see how long that would be you can go on the HUD site (click this link): hudhomestore.com and look up the property you are interested in bidding on. You must know, however, that if you bid a higher amount than the listing price, you'd be expected to pay that difference in cash.
A lot of HUD homes need repairs. It tells you right there in the listing on HUD site what the Repair Escrow is. What it means to you in plain English is that a HUD inspector determined that as the amount required to fix the house to the minimum standards to allow one to live in it. You don't need to have that cash up front. It will be added to your FHA 203b loan, which is like a regular FHA loan, actually easier, since there is appraisal required - HUD's report of what needs to be fixed is enough. There may be more things you'd like to improve upon, in which case you'd need to get an FHA 203k loan. If you do that, an additional new appraisal will be required. In either case, your total loan amount is the purchase price plus the repair escrow plus whatever repairs you want to finance less your down payment. You have 48 hrs from the moment you win the bid to agree and to turn in your paperwork and lender approval to HUD. So you should definitely get pre-qualified before you win the bid. Use a HUD approved lender easy to work with. I am currently using Bank of America, for instance.

An awesome $500 down conventional loan program

It's a 100% conventional loan. Unbelievable! The interest rate is only a little higher, like 1% only. But there is no mortgage insurance! So the monthly payment is the same as for an FHA loan. A poor person's dream come true!
Contact Tracy at tracy_m_sommerdorf@keybank.com  to get started. (Make sure to tell her Rita Andreeva referred you.) Oh, and if you open an account at Key Bank they'll deduct $150 off your closing costs.

Get government to help with down payment

There are a number of down payment assistance programs.
Here are links to such programs and contact information:
http://www.wshfc.org/buyers/homechoice.htm#hclender
http://www.homeownership-wa.org/search_resources/region1_2.htm

Should you buy a condo or a house?

In the market with low interest rates as it is right now, a condo fee is often as large or larger than the mortgage payment itself. You have to remember that a condo fee is used together with your mortgage payment, taxes and insurance to calculate your debt-to-income ratio. Make sure to read about those ratios in my previous post on financing.

A comparison example:
A 2-bd condo is listed for $40,000, tax $1400, homeowners' association fee $300.
Your loan amount would be: 40,000 less 3.5% ($1400) downpayment - $38,600. At the going rate of 4%, using the calculator in the right sidebar, your monthly mortgage payment comes to $184.
You add your monthly tax, condo fee, and insurance to that, and your total monthly payment is:
117 + 300 + 50 + 184 =  $651.
You can pay a bit more for a house, because you won't have a condo fee. Your taxes and insurance will be a bit higher, as well. A monthly payment on a 2-bd house listed for $70,000, tax $1700 with $2450 (3.5%) comes to: 322 + 142 + 60 = $524.

At first glance it looks like a better deal, but now add the water, sewer, gas and the garbage to that payment, which all come to about $200/mo, and now your actual money-out-of-pocket monthly payment is $724 per month! Then add the health club fee, since you can't go to a free pool and a free exercise room, add the fee for mowing the grass, and the security monitoring fee - now you are looking at $800 a month. Sure, you can save on the landscaping by doing it yourself and count that effort as equal to going to a health club. Oh, almost forgot - the condo fees often include things like cable or/and wireless internet, too. So add another $50 to your house payment. Honestly, the upkeep of a house is much higher than that of a condo, and you have more headaches and responsibilities.