No Down Payment Home Loan Programs
There are a couple no down payment loan programs available. Not everyone will qualify but they are definitely worth looking into. Both are government programs and if you have limited money for a down payment and you fit the criteria, these can be excellent choices for you to get into a brand new or pre-owned home.
USDA Home Loans
USDA Loan Features:
Rural Development Loans offer benefits that are not available in any other loan programs.
No Money Down: The borrower can finance up to 100% of the appraised value of the home with zero down out-of-pocket.
No Mortgage Insurance Payments: This can significantly lower the monthly housing payment.
Flexible Credit Requirements: Potential borrowers with less-than-perfect credit can still qualify for a loan.
Here is a good video that goes over the program…this guy isn’t local but the guidelines are pretty much the same…I’d recommend going with a local lender for these loans
Types of USDA Loans
Rural Development Guaranteed Loans: These loans are provided by private lenders and are guaranteed by the Rural Housing Service. Guaranteed loans are geared toward low and moderate income families who are unable to afford housing through conventional financing. The maximum loan amount is based on what the homeowner can afford. Qualifying applicants can obtain 100% financing in rural areas, but are required to pay a one-time 2% funding fee. This fee may be financed into the loan. These loans are typically made for 30-year fixed terms and carry affordable interest rates.
Rural Development Direct Loans: These loans are funded by the government (Rural Housing Service) and geared toward low and very low income families. Very low income is defined as 50% of the area median income; low income is defined as between 50-80% of the area median income. To qualify, families must be without adequate housing but must be able to afford mortgage payments (including taxes and insurance), which are usually between 22-26% of the borrower’s income. Mortgage payments are adjusted based on the household’s income. These loans are typically made for up to 33 year terms.
USDA Loans are not available everywhere, but you can check to see if the area you are interested is available here….click here to be taken to the map search
Here is a snapshot of one of the Areas south of Brandon, FL that has available areas (shaded area is not available) These areas are subject to change.
The second type of home loan program is the VA Loan program which is only available to veterans
VA LOANS OFFER THE FOLLOWING IMPORTANT FEATURES:
Equal opportunity for all qualified veterans to obtain a VA loan.
No downpayment (unless required by the lender or the purchase price is more than the reasonable value of the property).
Buyer informed of reasonable value.
Negotiable interest rate.
Ability to finance the VA funding fee (plus reduced funding fees with a downpayment of at least 5% and exemption for veterans receiving VA compensation).
Closing costs are comparable with other financing types (and may be lower).
No mortgage insurance premiums.
An assumable mortgage.
Right to prepay without penalty.
For homes inspected by VA during construction, a warranty from builder and assistance from VA to obtain cooperation of builder.
VA assistance to veteran borrowers in default due to temporary financial difficulty.
VA DOES NOT DO THE FOLLOWING:
Guarantee that a home is free of defects. VA guarantees only the loan. It is the veteran’s responsibility to assure that he/she is satisfied with the property being purchased. The VA appraisal is not intended to be an “inspection” of the property. A veteran should seek expert advice (a qualified residential inspection service), as necessary, BEFORE legally committing to a purchase agreement.
If you have a home built, VA cannot compel the builder to correct construction defects although VA does have the authority to suspend a builder from further participation in the home loan program.
VA cannot guarantee that a veteran is making a good investment.
VA cannot provide a veteran with legal services.
With more than 25.5 million veterans and service personnel eligible for VA financing, this loan is attractive and has many advantages. Eligibility for the VA loan is defined as Veterans who served on active duty and have a discharge other than dishonorable after a minimum of 90 days of service during wartime or a minimum of 181 continuous days during peacetime. There is a two-year requirement if the veteran enlisted and began service after September 7, 1980 or was an officer and began service after October 16, 1981. There is a six-year requirement for National guards and reservists with certain criteria and there are specific rules concerning the eligibility of surviving spouses.
VA will guarantee a maximum of 25 percent of a home loan amount up to $104,250, which limits the maximum loan amount to $417,000. Generally, the reasonable value of the property or the purchase price, whichever is less, plus the funding fee may be borrowed. All veterans must qualify, for they are not automatically eligible for the program.
VA guaranteed loans are made by private lenders, such as banks, savings & loans, or mortgage companies to eligible veterans for the purchase of a home, which must be for their own personal occupancy. The guaranty means the lender is protected against loss if you or a later owner fails to repay the loan. The guaranty replaces the protection the lender normally receives by requiring a down payment allowing you to obtain favorable financing terms.
Before you get a VA loan, you will need a VA Certificate of Eligibility.
Get one here
Advantages of a VA Home Loan
Zero Down VA Loans up to Conforming Loan Limits
No Monthly Mortgage Insurance Premiums
Competitive Interest Rates
No Prepayment Penalties
VA Guarantee for Loan Security
Up to 100% Seller-paid Costs on Purchase Loans
Easier Qualifying Standards
Streamline Refinancing Available