This article is our first in a comprehensive series on low down payment options for purchasing a home.
It is a commonly held belief that you need a large amount of cash on hand to buy a home. While the traditional 20% down payment conventional loan provides some great incentives, it is often very difficult to save that much cash in a reasonable time frame, even if you can afford the monthly mortgage payments for the home you want. In this post, I will provide information on a variety of low and even 0% down payment mortgage options.
1) Federal Housing Administration (FHA) Loans
FHA loans are government backed loans that have a variety of potential benefits for many buyers:
2) Veterans Affairs (VA) Loans
Current and former military members are generally eligible for loans backed by the Department of Veterans Affairs. These loans are provided by private lenders, but backed by the VA. Here are some of the benefits of VA loans:
Find out about Apex’s Heroes First program, which can save you additional money on your VA loan! The Heroes First program also applies to other community heroes including teachers, police, firefighters, medical professionals and more!
3) USDA Loans
The United States Department of Agriculture (USDA) guarantees home loans for low-middle income buyers in eligible rural or suburban areas. This is another program where homebuyers can purchase a government-backed loan with a private mortgage lender. Benefits of USDA loans include:
4) Low Down Payment Conventional Loans
There are now conventional loan options, such as the Fannie Mae HomeReady Mortgage, that allow for low down payments, although they do require a strong credit history. Benefits of low down payment conventional loans include:
5) State and Local Assistance
A wide variety of state and local down payment assistance programs exist to encourage and help people to purchase homes. These include 0% interest loans to use toward down payments, student debt forgiveness programs, grant assist programs, and more. Our future blog posts in this series will focus on specific state and local programs. Click here to see a brief list of some of the programs available in Maryland, Virginia, and DC.