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. Recently, however, a number of changes were made to the income and credit score requirements for the popular loan option.
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.
Borrowers who use CHIP can receive loan amounts up to $417,000. All CHIP loans are 30-year fixed and borrowers must contribute at least $500 toward the loan. While the CHIP loan does not require you to be a first-time buyer, you can not own any other real estate at the time of closing. Owner occupancy is required on the home being purchased, and the property appraisal has to come back saying that the market where the property is located is stable.
Here is a rundown of the recent changes to income and credit score requirements for CHIP, provided by BB&T Mortgage Loan Officer Kevin Connelly:
- Within the DC MSA (metropolitan statistical area), the maximum income for 100% financing is $84,000.
- In order to qualify for 100% financing, the borrower must now have a minimum credit score of 680.
- In order to qualify for 97% financing, the borrower must have a minimum credit score of 620.
In order to make sure that borrowers are qualified, Connelly said that the bank does a complete manual underwrite. The borrower is required to provide two months of pay stubs, two months of bank statements, and two years of W-2 forms. In addition, borrowers are required to attend a homebuyer education course.
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
This article originally published at http://dc.urbanturf.com/articles/blog/sponsored_changes_to_bbts_chip_loan_the_fha_alternative/6734
Most Popular... This Week • Last 30 Days • Ever
After a slew of developments delivered in Ballston last year, — totaling over 1,000... read »
The planned 8-unit development would be located on K Street right along the Potomac R... read »
Loan recasting is a growing practice- so what is it?... read »
The project would replace a concrete plant and would deliver the neighborhood's first... read »
The next phase on the Center Block would deliver 166 apartments and 221 hotel rooms.... read »
UrbanTurf has compiled virtual looks at large new developments around the DC region.... read »
The preferred mortgage product among most home buyers is the fixed-rate mortgage. How... read »
STAY DC provides rental aid and utility payment grants to at-risk District residents ... read »
Federal Realty plans to eventually file a planned unit development application for th... read »
The project would also deliver new office space for the fraternity, which has been at... read »
With this weekend's DC houseboat tour a day away, UrbanTurf thought it only fitting t... read »
President Obama travels to Denver this morning to sign the stimulus bill that has bee... read »
In this week's installment of Ask An Agent, a reader wonders if there is a rule for h... read »
As The Wharf prepares to begin construction, DC's houseboat community heads to its ne... read »
In this week's installment of Ask An Agent, a reader asks a fairly common question th... read »
DC Real Estate Guides
Short guides to navigating the DC-area real estate market
We've collected all our helpful guides for buying, selling and renting in and around Washington, DC in one place. Visit guides.urbanturf.com or start browsing below!
Intro guides for first-time home buyers
Awesome and unusual real estate from across the DC Metro