- 1). Apply for a USDA Rural Loan if you live in a rural area. This loan is an FHA loan, but requires no down payment. It is not specifically for first time homebuyers, so anyone can use it. It has some income restrictions in that you can make too much money to qualify for it, but it is designed to help increase home sales in areas where population is low, so have your loan officer check HUD's USDA map to be sure the property address fits this requirement.
- 2). Get a VA loan if you are eligible. There is no down payment required on VA loans, but you need to have really good credit. Loan limits have increased recently, so you may be able to buy your dream home through VA.
- 3). Try to get an 80% conventional first mortgage and bypass the mortgage insurance requirement, and get the seller to hold a second mortgage for you. The interest rate of the second mortgage is something you have to negotiate with the seller.
- 4). Look into FHA, another alternative for homebuyers. Lower credit scores are required than conventional lending. There is a down payment of 3.5% of the sale price required, but this can be a gift from Mom and Dad or a relative, making it a no down payment "out of pocket" for you. If there is no one available to gift you the funds, check into your county's SHIP Program, which may have grant money for you to use as down payment. Negotiate with your seller to pay closing costs, and you will be a happy homeowner with your nest egg still intact.
- 5). Since the housing market is slow and property values have dropped, you might find a seller who is so motivated, that he would be willing to owner finance his home for you. This is all about what you and he can negotiate, so good luck on negotiating 100%.
previous post
next post