BB&T’s Community Homeownership Incentive Program, better known as CHIP, is one of the best alternatives to FHA financing available on the market today.
In short, CHIP offers qualifying home buyers up to 100% financing with no private mortgage insurance, in stable and increasing value markets. The lack of private mortgage insurance means that the monthly payments on a CHIP loan are often lower than those on competing FHA loans.
Here is a side-by-side comparison of how CHIP monthly loan payments compare to FHA payments on a $400,000 condo purchase with 3.5% down:
CHIP versus FHA
Here is a quick rundown of specifics and eligibility qualifications for CHIP provided by BB&T mortgage loan officer Kevin Connelly:
- Borrowers who use CHIP can receive loan amounts up to $417,000.
- Borrowers with a combined household income up to $84,000 can take advantage of 100% financing.
- All CHIP loans are 30-year fixed. The base interest rates for condos are currently around 4.5% and 4.375% for single-family homes and row houses.
- All borrowers must contribute at least $500 toward the loan and have financial reserves to cover two-month PITI (principal, interest, taxes, and insurance).
- Owner occupancy is required on the home being purchased.
- The home appraisal has to come back saying that the market where the property is located is stable. DC, Arlington, Alexandria, Prince George's, Prince William and Loudoun Counties are all considered stable, so borrowers across the DC metropolitan area can qualify for 100% financing.
- Condos must be in buildings that are at least 51% owner occupied and no more than 15% delinquent on unit owner condo fees.
Below is a breakdown on a $400,000 condo purchase using 100% CHIP financing:
$400K condo purchase using CHIP's 100% financing
This article originally published at http://dc.urbanturf.com/articles/blog/sponsored_bbts_chip_loan_the_fha_alternative/3461
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