Buying a House with Little to No money down

5 MORTGAGES WITH LOW MONEY DOWN PAYMENTS

Buying a House with Little to No money down is possible. The first step in buying a home is getting pre-approved so you are aware of what you qualify for as well as what your monthly payment, down payment and the amount you must have at closing.

Good news, there are lots of mortgages in which the buyer does not have come up with a huge down payment and getting pre-approved helps navigate you into a loan that can potentially assist with that.

Here are the top 5…

1) DEPARTMENT OF AGRICULTURE LOANS

The Department of Agriculture has what is known as the Rural Development mortgage guarantee program. This program is available in cities and towns within Stanislaus and Merced counties but this program is so popular that it has consistently run out of money before the end of the fiscal year. This means that the timing of the homebuyer’s application is vital. Many mortgage consultants list this program as their favorite to recommend to many of their clients. Despite the name of the program, its eligibility isn’t confined to rural farmland. Yes, you can buy a residential single family home under this program!! USDA Fact Sheet

2) CAL HFA

CalHFA’s down payment programs School Teacher and Employee Assistance Program and MCC require you to be a first-time homebuyer. To know for sure, you should understand that a first-time homebuyer is defined as someone who has not owned and occupied their own home in the last three years. That means if you’ve never owned a home, you’re a first-time homebuyer. It also means that if you owned your home three or more years ago, but sold it, you are right back to being a first-time homebuyer again, and you can take advantage of all of the benefits of CalHFA’s first-time homebuyer programs.

For example, to be eligible for this CalHFA Conventional program:

Borrower Requirements

• CalHFA borrowers must complete homebuyer education counseling and obtain a certificate of completion through an eligible homebuyer counseling organization. 
• Meet CalHFA income limits for this program.

*In the case of conflicting guidelines, the lender must follow the more restrictive. 

Property Requirements

• Sales price of the home cannot exceed CalHFA’s sales price limit
• Be a single-family, one-unit residence, including approved condominium/PUDs
  • Guest houses, granny units and in-law quarters may be eligible
• Manufactured housing is permitted
• There is a five acre maximum on the size of the property

*In the case of conflicting guidelines, the lender must follow the more restrictive. 

Cal HFA also offers down payment assistance. The money you put “down” or the down payment on your home loan can be one of the largest hurdles for many first-time homebuyers. That’s why CalHFA offers several options for down payment and closing cost assistance. This type of assistance is often called a second or subordinate loan. CalHFA’s subordinate loans are “silent seconds”, meaning payments on this loan are deferred so you do not have to make a payment on this assistance until your home is sold, refinanced or paid in full. This helps to keep your monthly mortgage payment affordable

3) FEDERAL HOUSING ADMINISTRATION (FHA)

The Federal Housing Administration offers a low down payment option to the general public. With a minimum down payment of 3.5 percent, a homebuyer can receive a guaranteed loan. In today’s market, about 15 percent of all mortgages are FHA insured loans. This is up by more than 12 percent from the market share that the FHA had during the housing boom. They have increased their market share due to the fact that many other low down payment options were eliminated when the housing bubble burst.

4) NO DOWN PAYMENT VA LOAN

These are loans that are guaranteed by Veteran Affairs — formerly known as the Veterans Administration. These loans are designed for veterans who qualify for VA home loans. These loans do not require any money down to obtain loan approval. They actually originate through private lenders, but they are guaranteed by the VA.

Another great benefit with this type of loan is the fact that there are no mortgage insurance requirements. The borrower is required to pay what is known as a funding fee, but the fee can be rolled into the loan amount. The funding fee for VA loans varies, depending on certain criteria such as whether the veteran in question served in the regular military or the reserves, and whether it is the veteran’s first VA loan or a subsequent one. The funding fee can be anywhere from 2.15 percent to 3.3 percent.

5) NAVY FEDERAL LOAN

The Navy Federal Credit Union, which is the nation’s largest credit union in memberships and assets, offers 100 percent home financing to all of its qualified members for buying homes that will be used as a primary residence. However, the eligibility is restricted to members of the military, civilian employees of the U.S. Department of Defense, and direct family members of the military.

THERE ARE LOTS OF CREATIVE WAYS FOR HOME BUYERS TO GET FINANCING

The problem is that many of these options are not commonly known by the average person. In most cases it’s wise to contact a mortgage broker or consultant to help find the best mortgage program for a particular situation. Working with the right mortgage officer will help alleviate the stress associated with finding an ideal lending situation.

Cheers!