Whether you’re a first-time homebuyer or moving to a new home, 100% FHA financing, with its second lien feature, could be the ideal solution for achieving your homeownership dreams.
A path to affordable homeownership
Financing a home can be one of the biggest challenges for homebuyers, especially in competitive housing markets. The FHA’s 100% financing program allows buyers to purchase a home with no down payment, making homeownership more accessible to a broader range of people — especially those with decent credit but limited cash reserves.
What is 100% FHA financing?
Federal Housing Administration (FHA) loans have traditionally required a down payment of at least 3.5% of the home’s purchase price. With 100% FHA financing, however, eligible buyers can finance the entire purchase amount — eliminating the upfront savings requirement that can otherwise take years to accumulate.
How the second lien works
An essential part of 100% FHA financing is a second lien. Here’s how it works:
- The first mortgage covers the majority of the home’s cost.
- A secondary loan, or second lien, is used to finance any remaining costs, such as the down payment.
This second lien is subordinate to the primary mortgage — it gets repaid after the main loan. This structure allows buyers to enter the housing market with minimal out-of-pocket expenses. Depending on the terms at the time of the rate lock, the second lien may be repaid or, in some cases, forgiven over time.
Benefits of 100% FHA financing
- No down payment: Finance the full purchase price without cash upfront.
- Flexible credit requirements: Credit scores as low as 600 are acceptable, subject to underwriting requirements.
- Flexible income: No income limits for this program.
- Prior homeownership okay: You are not required to be a first-time homebuyer.
- Second lien support: A second lien helps cover additional costs without requiring out-of-pocket expenses.
- Expanded access: Buyers with limited savings can buy a home sooner.
Should you consider 100% FHA financing?
With this innovative program, homeownership becomes possible for many who felt it was out of reach. As home prices rise, saving for a down payment becomes increasingly difficult, especially for first-time buyers.
If you have stable income, meet FHA credit and income requirements, and are ready to own a home but can’t afford a large down payment, 100% FHA financing could be an excellent option.
We’re FHA experts
Government loan regulations change frequently, so it’s important to work with an approved lender who can access current and accurate information. If you think 100% FHA financing might be a good fit for you, Network Mortgage can help. We can clear away the jargon, review your options, and help you find the best loan for your situation.
