what's the catch?

 

Usually it requires you to be a first time home buyer, which I'm sure you are, and allows for a down payment as low as 3% of the total cost rather than a standard 20%.

The FHA doesn't actually give loans, they simply insure the loan (similar to PMI). Most larger mortgage companies (banks or otherwise) are qualified FHA lenders.

 

so, there's nothing up with it, and if i qualify, i should do it?

 

yes.

also, the 3% can be paid by the seller. they just passed a bill ensuring that to help w/ the housing issues.

 

now, there's a limit for the amount of the loan, right?

 

If you qualify, of course.

why would the seller pay the 3% down payment? That doesn't make any sense.

 

Why wouldn't they pay the 3%? With the way the market is right now sellers are contributing 6% of selling price+ to closing costs. The 3% down is due as a closing cost.

 

based on location:

Put in your state and county https://entp.hud.gov/idapp/html/hicostlook.cfm

 

That 3% isn't closing costs though, it's a standard down payment. Sure, closing costs can be included in the loan resulting in no out of pocket costs, but just because they can doesn't mean they will. I guess it all depends on how badly somebody wants to sell... 3% of a 500k house (still cheap in CA) is 15k. I don't know many people who wouldn't think twice about giving that much money to they buyer just to buy their house from them.

 

what's the difference between FHA Forward, HECM, and Fannie/Freddie?