What Is a Flex 100 Home Loan?

A Flex 100 Home Loan is a special type of loan that requires no down-payment, allowing a home buyer to obtain 100 percent financing on a new home. These special programs come with advantages and disadvantages, but are often attractive options for the first-time home buyer.

Ease of Obtaining

Not all financial institutions offer Flex 100 Home Loans, and those that do generally expect their customers to have a strong credit history. By financing 100 percent of a home purchase price, the lender takes on a substantial risk, creating the need for strict program entry requirements.

Interest Rates

Interest rates are generally higher for Flex 100 Home Loans than for more traditional loan packages, again due to the amount of risk incurred by the bank. For smaller Flex 100 Home Loans, the rate difference may be too small to make a significant difference in monthly payments.

Insurance

Most financial institutions require participants in a Flex 100 Home Loan to obtain and carry private mortgage insurance, which can add significantly to monthly loan payments.

Closing Costs

Most Flex 100 Home Loans do not allow financing of closing costs; thus, closing costs must be paid in full at the time of the loan. Closing costs can include bank fees and loan origination fees, and are usually several thousand dollars for home loans.

Similar Programs

Due to the popularity of Flex 100 Home Loans, similar loan packages like "Flex 97" or "Flex 95" have been introduced by financial institutions. These programs trade better interest rates for a down payment, more than would be paid on a Flex 100 but less than what would be expected in a traditional home loan package.