United States

How to buy a home with no money down in the United States?  

The home ownership in the US has fallen to a generational low, thanks to the lack of first-time buyers. And, those who are planning to buy a home in the US for the first time don’t have any enough money in their savings accounts to pay the down payment required to qualify for a mortgage after paying for the rent,  groceries, commute and other expenses.

Another big reason behind the lack of first time home buyers in the US is that a majority of population believe that they need to pay 20% of their mortgage as the down payment but this is a myth. The truth is that the United States not only have many public and private programs offering no money down mortgages for the first time home buyers but also many legitimate ways to put down as less as 3% of the mortgage. Here are your options when it comes to buying a home with no money down in The United States (US).

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For another great resource for American buyers only click HERE

The USDA Zero-Down Payment Mortgage Program 

In an effort to help the rural development, The United States Department of  Agriculture has created a zero-down payment mortgage program for the low-to-moderate income families of the country. And the MIP (Mortgage Insurance Premium) of this program is much than any other of no money down mortgage available in the country.

The MIP of the USDA Loan is just 0.35% and this quite low compared to 0.85% for the loans offered by the Federal Housing Administration (FHA). The Mortgage Insurance Premium is added to your monthly payment.

Wait! Are you thinking that the rural area is all about farms and un-development land? Stop thinking about it because the USDA property eligibility map shows the most areas outside the major cities are considered a rural area.

To check your eligibility for a USDA Loan, visit its official website: https://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do

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For my Canadian friends, this one is is more tailored towards mortgages in Canada

100% Home Loan Financing Offer of The US Department of Veterans Affairs

For veterans, the Home Loan offered by the US Department of Veterans Affairs is the best way to buy a home in the US with money down, thanks to its 100% financing offer for the eligible veterans. The best thing about the VA home loans is that they don’t require any mortgage insurance, so you can save thousands of dollars a year. However, they require you to pay the one-time VA Funding Fee, which is 2.15% of the loan amount. This one-time VA Funding Fee is charged in order to help the program be self-sufficient.

The credit scores required for a VA Home Loan vary from lender to lender. While most of the lender will require a 600+ credit score, some small lenders can also accept lower credit scores. To obtain 100% Home Loan Financing from the US Department of Veteran Affairs, you need to obtain a  VA Certificate of Eligibility. For more information about VA Home Loans, visit the official website US Department of Veterans Affairs: https://www.benefits.va.gov/homeloans/index.asp

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100% Home Loan Financing Offer of Navy Federal Credit Union

The Navy Federal Credit Union offers 100% Home Loan Financing to its members, providing they are the first-time home buyers. The credit union don’t charge any Private Mortgage Insurance (PMI) and offers no money down mortgage programs for conforming and super jumbo loans.

The maximum loan limit for conforming loans is typical $424,100, though the loan limit can vary by state and county. Jumbo loans are Jumbo financing available up to $1 million. To know more about the 100% Home Loan Financing Offer of Navy Federal Credit Union, visit its official website: https://www.navyfederal.org/products-services/loans/mortgage/100-percent-financing.php

What is the Next Best Option if you don’t qualify for a no money down mortgage in the United States?

In case, you don’t qualify for any of the available no money down mortgages in the US, the FHA Loans & Conventional 97% LTV Mortgage come to your rescue.

 

vvvv Here is a brief detail of both of these options vvvv

The Federal Housing Administration (FHA) Loans

The Federal Housing Administration (FHA) Loans have been helping people become homeowners since 1934.  If you want to buy a home in the United States with no money down, you can apply for FHA Loan and use Gift Funds for 100% Down Payment of your Home Loan Amount, if you have a friend, relative or a company willing to gift you the money required for the down payment.

The FHA Loans are not only the best way to buy a home in the US with money down but also to buy a home in the US by paying the lowest down payment of 3.5% of your total home loan amount, compared to 20% required by the conventional home loan providers. The government-backed FHA Loans are the most popular home loan option for the first-time buyers of the US, thanks to their flexible qualifying requirements, compared to conventional loan providers. For more information or to check your eligibility for the FHA Loans, visit the official website of The Federal Housing Administration (FHA) of US: https://www.hud.gov/buying/loans

Conventional 97% LTV Mortgage

For the first-time home buyers, who don’t qualify to buy a home with no money down in the United States, the Conventional 97% LTV Mortgage is the lowest money down option available in the country. The Conventional 97% Mortgage program is offered by many lenders in the US.

The biggest benefit of taking the Conventional 97% Mortgage is that it requires just 3% down payment of the total mortgage amount and that’s even lower than the 3.5% down payment required by The Federal Housing Administration (FHA) Loans.

The Conventional 97% LTV also offers 100% Financing of the down payment if you have any friend, family member, or a company willing to pay your down payment of your mortgage as a gift.

More Resources for United States home buyers only:

Good Mortgage America: Factors in Buying a Home with Confidence: Team, Attitude & Approach

Buying America the Right Way: What overseas real estate investors need to know to get it right when buying in America