If you're thinking about buying a home but are worried about coming up with enough money for the down payment, you might want to consider down payment assistance programs. These programs can provide thousands of dollars in assistance and get you into a home without having to save the conventional 20%. Let's explore 4 down payment assistance options and get you on the path to homeownership.
When you buy a home, a down payment will need to be paid upfront. A down payment is your contribution toward the purchase of the house, while the lender provides the rest of the money in the form of a mortgage loan. While conventional home loans require a 20% down payment, you can take advantage of loans with down payments as low as 0%. Typically, down payment assistance programs are meant for first time home buyers, but exceptions exist for repeat home buyers if they haven't owned a home in the last 3 years.
When you're looking for down payment assistance, a variety of no down payment and low interest loans are available. As a matter of fact, there are over 2,000 down payment assistance programs available nationwide at county, city and state levels.
- Conventional Loan 97
USDA loans offer 100% financed mortgages which translates to no down payment. This type of loan focuses on low-to-moderate income homebuyers. These loans often have rates that are lower than other mortgages requiring low- or no-down payment. Click here to see if you're eligible.
FHA Insured Loan
The FHA insures loans with a 3.5% down payment, and you can qualify with a low credit score (580). If your credit score is 500-579, you can still qualify but you will pay a 10% down payment. Click here to see FHA loan requirements.
HomeReadyTM home loans offer a 3% down payment and are a great option for low income, first-time home buyers. A unique feature of the HomeReadyTM mortgage is you can use the income of everyone living in your household to get qualified and approved. This home loan also offers below market mortgage rates.
Conventional Loan 97
Conventional loan 97 offers a 3% down payment based off of the price of the home. For example, if you were to buy a $100,000 home, you would pay only $3,000 as a down payment. In addition, the down payment can come in the form of a gift, community seconds, grants, or your own cash.
VA loans offer 100% financing (no down payment!) and are available to members of the U.S. military, veterans, and surviving spouses. To learn more about eligibility for VA home loan programs, visit the VA government website.
If you are considering a loan for down payment assistance, talk to your lender about the options included in this article. You can also find specific programs in your area by searching online for "down payment assistance" and add your city, county, or state. Learn about other down payment assistance options, like second mortgages and grants, in our "Insider's Guide to Home Finance".