You DON’T need 20% down to buy a home!

Do I need 20% down payment to buy a home?

I saw it again on the news this morning.  Some talking head “Real Estate Expert” was telling the national audience that lenders require 20% down payment.

Generally speaking, this couldn’t be further from the truth, and needing 20% down is a huge misconception in the marketplace today. For the average home buyer, there are numerous options for obtaining financing with less than 20% down.

DON”T ASSUME! Contact a local licensed mortgage loan officer and let them professionally review your individual situation. Click here to learn how to shop for a lender.

NO DOWN PAYMENT OPTIONS:

VA Financing – Here is a big thank you from the government. As a Vet, you are eligible for zero down payment, 100% financing on a home purchase. You either need to be an active or honorably discharged member of the armed forces or national guard. The seller can pay your closing costs and there is no mortgage insurance, saving you a lot of money monthly on your home. Click here for more information on VA home loans.

USDA/Rural Development – The Guaranteed USDA program offers zero down payment 100% financing for qualified borrowers purchasing a home in a rural area.  There are many locations just outside of major metropolitan areas that are eligible for this program.  The program has household income restrictions for their program, so Click here to see if the area you’re looking is USDA Rural Development eligible and if you income qualify.

LOW DOWN PAYMENT OPTIONS:

FHA Financing – FHA offers home loans with as little as 3.5% down.  FHA has no income limits for the household, but does have loan limits, based on the county in which you are purchasing the home.  Click here to check on the limits for your area.  FHA is one of the more lenient programs in regards to qualifying, and the down payment can be received as a gift from an eligible source (parents, state or local program, etc).

Local and State Bond Money Programs – Many states and even some larges cities have down payment assistance programs that can be used in conjunction primarily with an FHA loan. These programs vary widely, but if available in your area, are a great tool for those who qualify. Contact a local lender to inquire what programs may be available in the area you want to buy a home.

Conventional Financing – Fannie Mae and Freddie Mac both still offer programs with as little as 3% down.  For example, FannieMae offers HomePath financing on eligible FannieMae foreclosures.  For those with acceptable credit, many conventional loans are available with just 5% down.

WHO NEEDS 20% DOWN?

  • Investment properties typically require at least 20% down
  • JUMBO loans, which are loans generally over $417,000, generally require at least 20% down


Zero Down Home Loans Are Back

Zero down payment home loans are back. Actually, some of them never went away. VA and USDA Rural Development are two very popular home loan options. Learn more by watching this ROYAL performance… CG LIVE from London!

Thoughts? Log in and Post



IRS Reports First Time Home Buyer Tax Credit Abuse


The IRS says there was significant abuse and fraudulent claims related to the $8000 First Time Home Buyers tax credit. Pretty shocking numbers… $29 Billion dollars given to 4 million people, and the fraud amounted to…

What are your thoughts? Log in an post!



I want to buy a duplex!

I want to buy a duplex

I hear this every week. Seems like when it is a buyers market, everyone want to be Donald Trump Jr.

OK, so what is my #1 question? How much do I need for down payment!

Buying a duplex, triplex, or quad isn’t really overly complicated on the mortgage side.  You basically have two options:

1) Are you going to live in one unit?

If yes, then you can potentially get an FHA loan with as little as 3.5% down payment.

2) Is every unit going to be a rental?

If yes, then your down payment options are more expensive. Basically you are going to need 20% down. You can usually get a better interest rates with even bigger down payments.

Of course there are many other factors that come into play. Credit scores are a great example, as is trying to get a mortgage if you already have more than 4 mortgage loans.

While 20% down payment is a lot of money, the investment in rental property at today’s prices should realize you double digit returns…  and that is a LOT better than the banks are giving you to leave it sit in their vault!


Affordable Advantage Zero Down Payment Program in MN

Zero Down Payment Home Loans for first time home buyers are back in Minnesota with the new AFFORDABLE ADVANTAGE program.

Read moreAffordable Advantage Zero Down Payment Program in MN