These days, a mortgage that requires low and no down payment loan can be hard to find. They are typically only available to people who demonstrate they have the income to repay such loans and are a good credit risk. Depending on the lender (public or private), you’ll likely need a credit score of 620 or higher. If you are an aspiring homeowner with little money for a down payment, be sure to look into these potential loan options:
Veterans and their families may qualify for a home loan through Veterans Affairs (VA). As an insurance program, the VA offers 100% financing of mortgages and guarantees them up to $424,100. They do not require any down payment and mortgage insurance can be included in the loan itself. Lenders have different requirements, but in general, qualifying borrowers should have no more than a 41% debt-to-income ratio. If you can obtain a Certificate of Eligibility (COE) from the VA, you can apply for a no down payment loan through this program.
First-time homebuyers that live in designated suburban and rural areas may be eligible for a U.S. Department of Agriculture (USDA) Rural Development Housing loan. The program is intended for those who live in remote areas, but there are places in suburbia that do fall under the locational restriction. Loan applicants must have at least a 600-640 credit score and make less than certain income amounts. A loan guarantee of 3.5% is required upfront, but borrowers can choose to include it in the loan itself so that no cash is required when the loan closes.
The biggest credit union in the U.S. in membership and assets, NFCU’s low and no money down mortgage loans are a lot like VA loans. You won’t be required to carry mortgage insurance, but there is a funding fee of 1.75%. This fee can be rolled into the loan balance. However, you need to be a qualifying credit union member to apply for the loan. Membership is exclusive to U.S. Department of Defense (DoD) employees and contractors at DoD installations, personnel from all military branches, and family members of any of these members.
Loans insured by the Federal Housing Administration are intended to stimulate the economy and housing industry by encouraging first time home buyers to buy a home. They do require a down payment, but it is quite low. You can pay as little as 3.5% of the home sale price.
Buying a home is a big commitment, and for some of us, it can feel out of reach. That’s where no down or low down payment loans can help. They lend quite a bit more than just a helping hand, making it possible for many people to get their little piece of the American dream.
Here at DUFFY Realty, we can connect you with excellent lenders that understand the world of mortgage finance and will help you find a loan to meet your needs. Call us for a conversation today: (678) 318-1700
