Although it’s highly unlikely, yes – it is still possible to get a home without a down payment. Prior to the mortgage crisis and recession, many lenders offered mortgages without any down payment. Some lenders even allowed consumers to borrow up to 105 percent of the home’s purchase price so they could finance their closing costs. While we all know that mortgage requirements are much stricter, there are still loan options that can make homeownership a reality.
Today, a handful of government sponsored programs allow consumers with good credit and a steady income to buy a home. Here’s the low-down on loans with low/no down payment requirements.
These loans are only available to veterans, current members of the military and their spouses. While these loans don’t require a down payment or mortgage insurance, there is a funding fee that can be wrapped into the loan.
USDA Rural Development Loans
The U.S. Department of Agriculture offers loans to those with qualifying credit scores and income levels. Candidates for these loans must be able to afford payments but have a low or moderate income. Additionally, you must purchase a property in a designated area. These loans are primarily designed to help low-income families in rural areas purchase homes.
Insured by the Federal Housing Authority, FHA loans come with a minimum down payment of 3.5 percent. FHA charges an upfront premium and additional premiums each month. The standards are usually pretty lenient but a series of guidelines are published and will give you exact eligibility requirements.
If you are interested in getting approved for a loan or learning about types of loans available,
contact our preferred mortgage partner – Supreme Lending. Their team is passionate about helping consumers make homeownership a reality.