When preparing to buy a house you may be stressed about the house down payment needed to purchase the home. Some buyers delay buying a home for many years simply because they think the down payment for the home will cost too much. The fact is that you can buy a home with a low down payment or even no down payment. The real estate market changes frequently as so does lending options for buyers, fortunately there are still programs available to help buyers purchase a home with very little down payment.
In the past there were financing options that allowed buyers to actually finance their down payment. These loans were 103% loan to value loans and it could be argued that loans like these contributed to the real estate bubble in 2006 & 2007. Nowadays, low down payment programs do still exist but there in the form of government programs that have been around for a long time. Loan programs such as a VA Loan, Navy Federal and USDA Loan all require no down payment whereas a FHA loan which is what many people qualify for only require 3.5% down payment.
Your House Down Payment Could Be $0
VA loans are for qualified military personnel and veterans. The only fee a borrower pays to purchase a home on a VA loan is a funding fee which varies from 1.25% to 3.3%. This funding fee can also be applied to the loan essentially making the borrower bring in $0 funds to close.
Similar to the VA loan is the Navy Federal loan program, this program is offered to military personnel and their families, some military civilian employees and department of defense. This program also offers a no down payment program but unlike a VA loan the funding fee is only 1.75% which in many cases is less.
USDA loans also offer a no down payment program and it’s said that the program is so popular that they often run out of money to loan before year-end. Once misconception about USDA loans is that it’s only for farm land. This definitely is not the case so if you’re looking for a no down payment program consider this type of loan.
Lastly is the FHA loan, this is the most popular loan of all the types mentioned here and allows buyer with imperfect credit and only 3.5% down payment to buy a home.