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Buy a House with No Money Down

Want to buy a house but worried about the down payment?

Some lenders do offer no-down-payment options for specific loans. However, they are not common and may come with a number of requirements, including home location, a high credit score, and that the home serve as your primary residence.

No Down Payment Government Loans

Guaranteed by the Department of Veterans Affairs, VA loans have empowered millions of veterans and active duty military members to make the leap into home ownership. Backed by the U.S. Department of Agriculture, USDA loans are available to low- and moderate-income home buyers looking to live in eligible rural areas. (Loan types link to relevant mortgage page on the website.)

100% Financing Mortgages

Some lenders do offer no-down-payment options for specific loans. However, they are not common and may come with a number of requirements, including home location, a high credit score, and that the home serve as your primary residence.

Credit unions can also be a source for no-down payment home loans, though they will require you to be a member.

Low Down Payment Options

For prospective home buyers who don’t qualify for a no-money down mortgage, a low-down payment loan can be a manageable option. Backed by the Federal Housing Administration, FHA loans require as little as 3.5% down.

Designed for lower-income home buyers, the HomeReady loan from Fanny Mae and the Home Possible loan from Freddie Mac loans allow you to buy with a down payment as low as 3%.

Other Options

Coming up with the down payment is often the biggest obstacle prospective homebuyers face. Fortunately, there are several ways to save for a down payment that can make the home buying process a little less stressful.

Leasing-to-own typically requires a smaller down payment, and a portion of your monthly rent payment will go toward your purchase of the property.

Co-buying allows you to buy a home by partnering with a family member or friend. The two parties will split the down payment and the mortgage payments.

Borrowing from an IRA can allow you, your spouse, parents, or grandparents to withdraw up to $10,000 from a traditional IRA to put toward your home. Most IRA’s require that you repay the loan with interest, so you are essentially borrowing from yourself and keeping the money in the family.

Gift money from family members is a common way younger home buyers can come up with a down payment. The amount of gift money you can use depends on the loan type.

If private assistance isn’t an option, or isn’t enough to meet your down payment requirements, there are over 2,000 state and local down payment assistance (DPA) programs that can help.

Which options are right for you? Your Mortgage Loan Originator can steer you in the right direction. Reach out anytime.

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