Do you have a desire to have a small piece of the American dream? Does that dream include owning your own home? Are you just not sure how to get there; how to find the necessary financing to help you achieve your goal? There is good news, 100% loans do exist, and there’s a good chance that you might qualify.
For many middle to lower class income families, saving for a down payment can be a very real struggle. With possible debt, school loans and more, many fear that homeownership is out of reach. Fortunately, there are programs where the government provides insurance to the lender, even though the down payment on the loan is zero, thus helping future homeowners come up with the finances needed to purchase a home.
It’s not only new home buyers that are eligible for 100% financing through nationwide government-sponsored programs, but repeat home buyers as well.
There are multiple options available:
USDA Rural Development Single Family Housing Guaranteed Loan Program (The USDA Home Loan). The USDA Home Loan is designed to “improve the economy and quality of life in rural America.” It offers zero money down, lenient credit requirements and offers low-interest rates.
And to make programming even better, starting October 1, 2016, the USDA Home Loan program is lowering the upfront premium that gets tacked onto the loan with the monthly premium.
To qualify, there are some stipulations; you have to have enough income to support your house payment, but not too much income that it will put you over the limits set by the USDA to qualify. No matter, the assistance provided can get you that much closer to achieving your dream of homeownership.
When you hear Federal Housing Administration Loan (FHA) you don’t typically think of a zero down payment mortgage. There are ways this type of loan can work as a zero-dollar out-of-pocket loan for you.
One of the great benefits to the FHA program is the ability to receive a gift for the entire down payment. Gifts can come from a non-profit organization, a family member or any other eligible down payment gift source. In fact, it’s very common for buyers to receive cash down payment gifts, admittedly first-time homebuyers are the most likely to receive a cash gift, but repeat buyers receive them, too.
Now to just find a source for the gift, don’t give up hope, there’s a chance that you know a donor who could help. There are also many down payment assistance programs that could cover your down payment for you (like Home In 5 and Home Plus in Arizona).
Another FHA option is the Good Neighbor Next Door (GNND) loan. The U.S. Department of Housing and Urban Development (HUD) is rewarding “good neighbors”. Good Neighbors are folks like, teachers, police officers, firefighters, emergency medical technicians, and some other public employees can buy a home with just $100 down. $100 down is not 100% financing, but close to it.
What’s the catch?
HUD sells homes for 50% off list price with today’s current mortgage rates with just $100 down. You can find a HUD home in a designated revitalization area. Revitalization ares are those that are available by factors such as household income, homeownership rate, and the level of area foreclosures. If you are considering purchasing a HUD-owned property, the home must be your primary residence for 36 months.
So while the loan technically needs a down payment of $100 the effect is the same.