Graduated Payment Mortgage 245a
With this program a borrower with limited income; but is expected for that income to rise may buy a home sooner; due to this programs mortgage payments, start small and increase gradually over time.
This program was designed for 1st Time Home Buyers and also for Borrowers with limit income. This is for borrowers that have a limited income but do expect that income to rise in the next 5 to 10 years. But currently are not able to pay for the all of the upfront and monthly costs involved in buying and owning a home.
The Graduated Payment Mortgage program works in times of high interest when your 1st time buyer can not meet the standard mortgage payment, but does expect their income to rise in the next 5 to 10 years.
How this program works is like this; the GPM accrues negative amortization so that the initial mortgage payments are made at a discounted interest rate. The difference is then added to the principle balance. But larger than usual down payments are required to prevent the total amount of the loan from exceeding the statutory loan to value ratios. The down payment requirements for the GPM vary in proportion to interest rates on the loan.
The Eligibility for this program is open to all borrowers that will make the property their primary residence and expect their income to rise applicable in the future. All FHA approved lenders may offer Graduated Payment Mortgages.