Many in the real estate industry were concerned about the fallout of a proposed cap to maximum seller contributions from 6 percent to 3 percent for home purchases using FHA-insured loans. But the FHA is weighing another change that may cause less concern, Inman News reports.
FHA 3 Year Treasury ARM
FHA 3 year treasury arm
A 3 year treasury arm is a fixed rate for the first 40 months of the loan. Interest rates on this program can be up to 20% lower than comparable 30 year loans.
Its a great loan if your priority is to reduce your payment as much as possible. Its is also a great way to build equity the first 3 years of owning a home. You can just pay an amount closer to a comparable 30 year fixed and you will see the balance drop down.