Last Updated on December 3, 2023 by Eric Jeanette
FHA $100 Down HUD Home Program
Two of the primary benefits of an FHA loan are the flexible credit score requirements the low down payment requirement. However, even though the down payment is reasonable, many home buyers still struggle to come up with the 3.5%. The FHA $100 down payment program can help.
What is the FHA $100 Down Payment Program?
The FHA $100 down payment program is available to anyone who wishes to purchase a HUD home as their primary residence and can meet the basic qualifications for an FHA loan. It is essentially a no down payment mortgage program.
The program is available for the purchase of HUD homes only. Although the home must be lived in as a primary residence when using the FHA $100 down payment program, anyone can purchase a HUD home.
We have lenders in our network who are offering this great program. Simply complete the short loan scenario form and we will have one of the lenders contact you to get pre-approved. The form is just to begin a discussion and to answer questions without ordering a credit report.
FHA $100 Down Payment Requirements
These are the basic requirements for this special program:
- Primary residences of 1-2 units
- Eligible properties are single family homes, condos, manufactured homes and PUDs
- Loan terms of 10, 15, 20, 25, 30 year fixed or a 5/1 ARM
- For purchases only but can be combined with the FHA 203k rehab loan
- The purchase must be a full price offer for the HUD home
- At least 24 months since your last HUD home purchase
- Loan amount cannot exceed the FHA loan limits for that county
If you can meet, or the home meets all of the requirements above, then you may want to consider this program.
FHA $100 Down Payment Qualifications
The qualifications for the FHA program are the same as with any other FHA mortgage program with the exception of the down payment.
- You must be a US citizen
- Minimum credit score of 580
- Down payment of $100
- 2-year work history
- Can fully document income and assets
- No bankruptcies within the past 2 years
For a full detailed explanation, please read our article on FHA loan requirements. The only difference will be the down payment.
Benefits of the FHA $100 Down Program
The primary benefit of this unique program is of course the small down payment and it is essentially a zero-down program.
The other benefit that is often not talked about is when you are buying the home from HUD, there is a good chance you are purchasing the home below market value. This could present an opportunity to build equity in the home quickly.
$100 Down for an FHA 203k Rehab Loan
The $100 down program can also be used for an FHA 203k rehab program. With this program, you are able to finance the purchase of the home plus the additional money needed to rehabilitate the home. Read our article on the FHA 203k rehab loan to fully understand the program.
Consider the fact that you may be buying a home that has recently been foreclosed upon. There is a very good chance that it may be in disrepair and the FHA 203k rehab loan can help with that.
How to buy a HUD home
If you are looking to purchase a HUD home, you can find a list of HUD Homes for sale on the HUD homestore Website . You will see very few homes available on this website listing from HUD. This means you will have to buy just what I available or be very patient and wait for the right property to come along.
Once you found a home that you are interested in, you will need to contact a realtor who is HUD approved to submit your bid for you. If you plan to take advantage of this FHA program with just $100 down, then you must submit a bid for the full price. If you bid lower and are awarded the property, then you must use other financing.
If you are a realtor you can visit this page to learn how to become a HUD approved realtor.
Challenges with the FHA 100 down program
The program seems like a great deal for first time home buyers or anyone who may struggle to find the down payment needed. However, you will face two real challenges with the program.
Home Availability – There is often a shortage of HUD homes available for sale. When a home does become available, there is competition for those homes from other buyers. If you do find a home, it may not meet your needs or be located in the area where you prefer to live.
Lenders Offering the Program – Although FHA makes this program available, most lenders do not offer it or lack the understanding of how it works. This means just because a lender offers FHA loans, it does not mean they will offer the HUD 100 down program. If you need help finding a lender, then contact us.
An alternative to the HUD program and what we recommend is to use down payment assistance to help with the down payment. Then, purchase any home that may be for sale and not just a HUD home. Read more about down payment assistance programs.
FHA 100 Down Frequently Asked Questions
Why does the FHA 100 down program exist?
The FHA 100 down payment program exists because HUD is looking to sell homes that were recently foreclosed upon. These homes were previously financed with an FHA loan. HUD does not want to maintain the homes and instead would prefer to have them sold to families who can live in and maintain them.
Hud 100 down program with repair escrow
Many people ask about the $100 down program with money also available for repairs. This would be a combination of the FHA 100 down program with the FHA 203k rehab program. When combined, you can purchase a home with just $100 down and also the money needed for repairs or home rehabilitation.
What is a HUD loan?
One version of a HUD loan is the FHA $100 down payment program which allows for the purchase of a home owned by HUD with just $100 down
We can help you to find a HUD home and also finance it with the FHA 100 down program in the following states: states: Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming.