3 Mortgage options that require little or no money down

Coming up with a down payment can be challenging, especially for first time home buyers. The good news is, there are ways for qualified borrowers to get a mortgage with a small down payment, or even no down payment at all. Here’s a look at some mortgage options that require little or no money down.

FHA Loan: 3.5% Down

FHA loans are popular options for first-time home buyers because of the relatively small down payment, attractive mortgage rates and favorable credit requirements. An FHA loan is a mortgage that is insured by the Federal Housing Administration. The actual loan is funded by a private lender, which is then insured by the FHA. FHA-insured loans are less risky for lenders, allowing them to offer mortgage loans at a low interest rate with as little as 3.5% down. Learn more about FHA loans here.

Take This Quiz to see if you are eligible for FHA.

VA Loan: No Money Down

The Veterans Affairs (VA) home loan is a no money down program available to veterans, active-duty personnel, members of the National Guard and Reserves, and eligible surviving spouses. For those you qualify, a VA loan is the best deal around when it comes to home financing. Guaranteed by the Department of Veterans Affairs, VA loans require zero down payment and no mortgage insurance at all. The interest rate also tends to be lower than on conventional loans, because the government is taking on part of the risk.  Learn more about VA loan here.

Take This Quiz to see if you are eligible for VA loan savings.

USDA Loan: 100% Financing

If you don’t qualify for a VA loan, the next best thing is a USDA loan. Many people aren’t aware of this mortgage product. Insured by the U.S. Department of Agriculture’s Office of Rural Development, these loan offer 100% financing to qualified borrowers, and allow closing costs to be paid for by the seller or financed into the loan. Some of the eligibility requirements for USDA home loans include your income and credit history, and what county and zip code the home resides in. While USDA loans are not just for farms, the house must be in a rural area. You can look up an address on this map to see if the property is in an eligible rural area. Because there are specific guidelines for this type of loan, it is important to work with a lender that has experience dealing with USDA government financing to help determine your eligibility. Contact us to learn more about USDA loans.