How to Buy a Home With Little or No Money Down



If you want to buy a home but don't have the money for a 20% down payment, you still have plenty of options.

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If you're one of the many people dreaming about homeownership but your pocketbook isn't cooperating, you're not alone. A recent survey of prospective homebuyers revealed that the down payment is the No. 1 obstacle for homeownership. There are many options to buy a home with little or even no money for a down payment.

Most conventional loans require 20% down, but many loan programs require a lot less cash for a house. As home values continue to go up, this problem won't go away anytime soon. Last November, homeownership actually reached a 10-year low.

You might recall 10 years ago when it was really easy to qualify for a no money down mortgage, but after the recession, banks had to tighten up lending guidelines, so those loans aren't as common anymore. However, some options still exist:

  • USDA loans: Designed for rural and less populated areas, this loan lets you buy a home with no money down and relaxed lending guidelines.
  • VA loans: Eligible to military service members, this loans lets you buy with no money down and very low closing costs.
  • FHA loan: This is a good option for people who don't have sterling credit or much money for a down payment; you only need 3.5% down.
  • Conventional: There is a conventional loan that lets you put down just 1% and other programs that require 3%, 5%, or 10% down. These are good options for people with a steady job and good credit.
    Despite the recession, options for low or no down payment mortgages still exist.
One very important thing to remember is that many of these loan options require mortgage insurance. This will increase your monthly payment slightly, but it allows you to be a homeowner and reap the benefits of the tax breaks that come along with it.

If you have any questions about buying a home with little or no money down, don't hesitate to give us a call or send us an email. We'd be glad to help you!

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