Low to No Down Payment Options

Confident woman counting money for down payment.

Down Payment Solutions

Undoubtedly, the burden of a downpayment can feel like a block to homeownership. In spite of this, I have good news! There are lending solutions available to help clear the way to your home purchase.

What is a down payment?

A down payment, a home buyer 101 term, is the cash contribution, which is the percentage of the purchase price of a home. Typically, a buyer will contribute a downpayment, the agreed amount, from her own funds.

In a common scenario, a buyer will contribute at least 20% a home purchase price in her own funds. Fortunately, the motivation to get more borrowers in to homes has shaped more flexibility with these terms. As a result, borrowers now have several other options that require low to no downpayment criteria.

Five Low to No Down Payment Options to Consider:

FHA Loan

Federal Housing Administration (FHA) loans allow for a 3.5% down payment. A buyer with an average or lower-than-average credit score, will find this to be a forgiving home loan option. However, it does require a mortgage insurance premium (MIP). Good news, down payment funds can come from gifts, too!

Conventional Loan

Both FNMA and FHLMC have 3% down payment options for those who qualify under certain income or geographic restrictions. Furthermore, these programs also offer 5% down payment options for almost all borrowers. Need to renovate a home? For that reason, we can lend up to 95% via a conventional loan.

VA Home Loan

Veteran Affairs (VA) loans are available for active-duty, honorably discharged military service members and many surviving spouses. And most VA loans feature no down payment requirements. Most noteworthy, one of the benefits of a VA loan: No monthly mortgage insurance premiums!  Hence, this make VA loans very desirable along with competitive interest rates.

USDA Loan

US Department of Agriculture offers 100% financing for working families in small communities. Although, this program is income and geographically restricted, and some suburbs and smaller cities are eligible for USDA loans.

Portfolio Loan

PrimeLending offers a one-lien 100% loan program. Also, loan amounts go up to $475,000 and offer reduced monthly mortgage insurance.

Wondering what down payment options are best for you?

The short answer is: It depends. Generally speaking, there are various considerations including how much income, debt and credit score to name a few. In conclusion, if you are ready to explore in more detail, connect with me via my contact link. We can review the best tactic for your personal home finance strategy for you today.

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