5 Ways to Buy a Home With Little to No Down

Homebuyers with little money for a down payment are finding more home loans available for a low down payment or even no down payment.

Following are a few options for borrowers seeking low-down-payment and zero-down-payment home mortgages.

Contact us to connect you with a lender offering zero down home loans:

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1. No down payment: VA loan

No down payment: VA loan | iStock.com

The Department of Veterans Affairs, or VA, guarantees purchase mortgages with no required down payment for qualified veterans, active-duty service members and certain members of the National Guard and Reserves. Private lenders originate VA loans, which the VA guarantees. There is no mortgage insurance. The borrower pays a funding fee, which can be rolled into the loan amount. For purchase and construction loans, the VA funding fee varies, depending on the size of the down payment, whether the borrower served or serves in the regular military or in the Reserves or National Guard, and whether it’s the veteran’s first VA loan or a subsequent loan. The funding fee can be as low as 1.25 percent or as high as 3.3 percent. For first-time purchasers making no down payment, the funding fee is 2.15 percent for members or veterans of the regulator military, and 2.4 percent for those who qualify through service in the Reserves or National Guard.

2. No down payment: Navy Federal

No down payment: Navy Federal | iStock.com

Navy Federal Credit Union, the nation’s largest in assets and membership, offers 100 percent financing to qualified members who buy primary homes. Navy Federal eligibility is restricted to members of the military, some civilian employees of the military and U.S. Department of Defense, and family members.The credit union’s zero-down program is similar to the VA’s. One difference is cost: Navy Federal’s funding fee of 1.75 percent is less than the VA’s funding fees.

 3. No down payment: USDA

No down payment: USDA | iStock.com

4. Low down payment: Mortgage insurance

Low down payment: Mortgage insurance | Gajus/Shutterstock.com

Qualified borrowers can make down payments as low as 3 percent with private mortgage insurance, or PMI. For most borrowers, PMI costs less than Federal Housing Administration mortgage insurance. But PMI has stricter credit requirements. PMI has another edge over FHA: Once your mortgage balance is under 80 percent of the home’s value, you can cancel PMI. You can’t get rid of FHA insurance unless you refinance into a non-FHA loan.

5. Low down payment: FHA

Low down payment: FHA | iStock.com

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