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How to Buy a Home with $0 Down

Shawn Von Talge


Zero Down Home Loan ProgramsOne of the biggest hurdles to buying a home is the required down payment. Today’s typical financing programs require a minimum of 3% down on the purchase price.

With that being said, there are options for those who may not have enough money for a down payment but would otherwise meet all the required program guidelines. Many of these options have been around for quite some time but for one reason or another most people are not aware of them.

Below is a brief overview of several loan programs that do not require a down payment.

USDA Loan Program: This program is offered by the Rural Development division of USDA and can only be used to purchase homes located in rural areas. There are also household income limits with this program which are based on the median income level of the county in which the home is located. The program itself is a great resource for borrowers of whom meet the income guidelines and are looking to purchase in eligible areas.

VA Loan Program: This program is offered through the U.S. Department of Veterans Affairs (VA) and has been designed for members of our Armed Forces. In order to be eligible for a VA loan one must be a “qualified” veteran and this status can vary depending on the individual’s level and area of service. It’s a 100% loan with no PMI and unlike the USDA program there are no income restrictions or location requirements.

MHDC Loan Program: This program is offered through the Missouri Housing Development Commission (MHDC) and is only available in Missouri (although most other states offer similar programs). With this program the borrower gets a grant that can be used towards down payment and/or closing costs. This program is used in conjunction with another loan program (such as a FHA loan, USDA loan, VA loan, or conventional financing) and provides the borrower the ability to purchase a home with minimal out-of-pocket costs.

NHF Grant Program: This program is offered by the National Homebuyer Fund (NHF) and is similar to the MHDC program in that it provides the borrower with a grant to help overcome the hurdle of the down payment and/or closing costs. This program can be used in conjunction with FHA, USDA, VA or Conventional financing. It’s a great program and one that has been growing in popularity.

It’s important to point out that many of these programs have nuances that can affect your ability to qualify for them (i.e., income limits, property eligibility areas, first-time home buyer requirements, etc.). As such it is best to consult with a qualified mortgage professional to determine which program(s) you may be eligible to use.

Thanks for reading!

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