+1 vote
I am just starting out in researching what is needed to purchase a home. I am reading that FHA and conventional loans have a loan limit of $636,150 in San Francisco. Does this apply to the maximum amount granted to cover the down payment, or the entire mortgage? I live in San Francisco where starter homes average $1MM+, so if I'm thinking about this right, that means a maximum amount might only cover ~60% ($636K of $1MM). But I'm also reading down payments can be as low as 3% with certain programs. Going the conventional or FHA path, what is the minimum amount I could put down on a ~$1MM house?
asked Nov 29, 2017 in Downpayments by B

2 Answers

+1 vote
Your loan amount can be up to the area's limits no matter what the home price is. So for a $1M home, you would put down $363,850 at the loan limit stated above. If you can qualify, go for a conventional loan. At that down payment, you won't need mortgage insurance. You would pay mortgage insurance on the FHA loan even though you are making a substantial down payment. Plus, FHA has an upfront premium of 1.75% of the loan amount or about $11,000 in this case. If you go with FHA, keep in mind that the upfront premium can be above and beyond the area's loan limit.
answered Nov 29, 2017 by TimLucas (10,040 points)
0 votes
Maximum Loan Limits for conforming loans and government loans are now higher. Check loan limits. You are in a high cost area. You may want to consider a FHA loan plus a piggyback second.  80/10/10. Put 10% down payment, get maximum first mortgage via FHA or Conventional and get a second mortgage for the difference  

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answered Feb 11, 2018 by GustanCho (106,540 points)

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