Home Loan Options For Buyers With A Small Down Payment – If you are buying a home, then you are most likely looking for a home loan. Many people who don’t have the funds for a down payment assume that they won’t qualify, but there are options for buyers who have little to no down.
Home Loan Options For Buyers With A Small Down Payment
FHA home loans
The FHA loan is a great loan because it is the least strict with requirements. You only need 3.5% of a downpayment and it can be from a family member or friend as a gift. This gift is considered nonprofit. You can qualify for this loan as a first-time homebuyer or any time after. You are eligible for this loan if you are a US citizen and or a permanent resident.
VA home loans
VA loans are eligible for home buyers with current or former military service to have the option of getting VA home loans with no down payment option. No credit score is required for this loan and you can get 100% financing if you do not have the money for a downpayment. The financing fee is determined by whether or not it is your first VA home loan.
USDA home loans
These are specific loans for people who want to buy a home in a non-urban area. You may get 100% financing with no down with this loan. It is one of the better 0-down home loan options. You do need a credit score above 640 for this type of home loan. These loans come from a bank and are without mortgage insurance.
Conventional
The Conventional loan requires a 3% down payment. This loan is available for repeat and first-time home buyers. There are no upfront fees for this loan however there is PMI. You will need a great credit score for this loan as well.
HomeReady FannieMae
These are loans that are affordable for conventional home financing options with low down payments. They can be 3%-5% with flexible financing, and cancellable mortgage insurance.
Good Neighbor NextDoor Program
These loans are government-sponsored by HUD. This is to specifically help law enforcement, teachers, firefighters, and emergency medical techs purchase a home. The financing can cover up to a 50% discount on the purchase of their home.
Buying a home is one of the biggest decisions you will ever make and qualifying for a mortgage is a tricky task for many. There is a lot that goes into understanding each of these mortgage types and what they can do for you. Having no down payment or a small down payment makes for a larger monthly payment but with the right mortgage type, you can rest assured you are qualifying for a home within your budget.
For more information on home loans, contact me.
