Alternative to FHA for single family

[Jason Farr]

I saw an interesting article today that stated that Bank of America is offering a 3% down mortgage for a primary residence.  The best part is there is no insurance on the mortgage. However, it does not cover multi unit properties. It is good news because if people are not having to pay mortgage insurance they can potentially borrow more money to spend on houses and waste money on the insurance.  

[Sean Grapevine]

The 3% down program has been around through Freddie and Fannie for a few years now. They don't come stock without MI, but the MI can be bought out by the lender using a product called Lender Paid Mortgage Insurance. Just know that you'll pay for it in your rate. I few caveats about this program:

• Must be a first-time homebuyer (no ownership in the last 3 years)
• A conventional $150,000 loan at 4.375% with no MI pretty much costs the exact same as an FHA loan at 3.25% with FHA's MI
• These can't be used on investment properties
• Or condos.
• Your income must be below a certain amount depending on your area.