Low Down Payment Loans
Saving enough money for a down payment can be one of the biggest barriers to home ownership. The good news is that you have options when it comes to your down payment amount.
What is a Low Down Payment Loan?
Many people assume you can only buy a home with a down payment equal to 20% of the home’s purchase price. That just isn’t the case! There are many low down payment mortgage options available to help you achieve your dream of home ownership.
USDA Loans
USDA loans are federally guaranteed by the U.S. Department of Agriculture and offer 100% financing for homes in USDA-eligible areas. While borrowers are not required to make a down payment on a USDA mortgage, they will need to pay a 1% guarantee fee, which can be rolled into the closing costs, as well as monthly mortgage insurance.
VA Loans
Active duty military members and Veterans should look to VA loans for low down payment mortgage options. Backed by the Department of Veterans Affairs, VA loans offer no down payment options and do not require monthly mortgage insurance. It’s important to be aware that VA loan borrowers may have to pay a one-time funding fee that can be rolled into the cost of the loan.
FHA Loans
FHA loans, which are insured by the Federal Housing Administration (FHA), offer eligible borrowers mortgage options with just 3.5% down and flexible credit score requirements. FHA loans do require insurance paid as an upfront fee at closing and as part of your monthly mortgage payment.
Conventional 97
Conventional loans have low down payment options that allow borrowers to put down 3% of the home’s purchase price. Both Fannie Mae and Freddie Mac offer 97% loan-to-value (LTV), low down payment mortgage options. With a conventional loan, you won’t be required to pay an upfront insurance fee like with an FHA loan, but if you put less than 20% down, you’ll be responsible for paying monthly private mortgage insurance.
Get Started on Your Low Down Payment Loan
Get in touch with a mortgage expert who can help you find the right loan options for your situation.