Buying a home without a down payment

Buying a home without a down payment:

Years ago buying a home without a dime invested at closing aside from earnest money was common practice. These days many perspective buyers remain unsure of whether or not to move forward with becoming a homeowner because the media and government make it seem like buying a home comes with an astronomical expense and unrealistic restrictions.

Im writing this blog today to help educate you and your buyers on options for the 100% home loan today.

FHA-Yes one can still get an FHA home loan with $0 down. FHA will allow down payment assistance programs to help your buyers get into their new home, but the DPA (down payment assistance) programs must be government sponsored. These are only found through State and City Grant programs. If you go down to your local City Hall to the neighborhood services department I assure you that they will have information on what your City has to offer and what requirements are needed to receive it. FHA will not consider any other DPA programs, so while you can find them on the Internet they no longer can be utilized for a government loan product.

VA-This is the original 100% home loan. To qualify your buyer must be a Veteran with a valid certificate of eligibility. Unless your client already has a VA loan or has defaulted on their guarantee in the past (this includes GI bill student loans) they will qualify. One little know fact is that many Veterans have guarantee that allows them to purchase a lot more house than the VA county loan limits. For example I just closed a $400,000 VA loan last month with $0 down. In Texas if the Veteran is a Texas Vet the qualify for special programs as well. One includes a .5% discount in rate for being 30% disabled or more. Also they will grant a .50% reduction in rate to a surviving spouse of a veteran killed in action.

USDA-This is a great product that has seen a surge in the last 24 months. To qualify you simply have to have a property that is eligible and a buyer that meets the credit and income limits. Today they have the most libral credit guidelines and are funding 100% loans down to a 620 credit score. To check if your listing or home of interest is eligible use this link to USDA. http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do?pageAction=sfp&NavKey=property@11

TDHCA FTHB- program-Most states have a bond program to help first time home buyers. In order for your loan partner to use them they must be an approved lender for that program through the corresponding state. This particular program is for the state of Texas but your state likely has something similar. First Time Home Buyers (FTHB) in Texas can receive up to 5% in DPA funds. These funds are in the form of a Bank of America bond program. To check programs in your state click here https://bondloans.bankofamerica.com/ProgramByState.aspxFor specific areas buyers dont even need to be a FTHB for a list of those areas follow this link http://www.ffiec.gov/geocode/default.htm.

(Remember a first time home buyer is someone who has either never owned a home, or haven't owned a home in the last 3 years.)

HomePath-This is Fannie Mae's solution for trying to escape their inventory, it is a great asset to the consumer. Buyers can receive 3% in down payment assistance and us a 97% Fannie Mae program to purchase the property as long as its a Fannie Mae owned home. To find out if your listing or home is owed by Fannie Mae click here http://www.fanniemae.com/loanlookup/ These great loan products also do not need an appraisal and are the only 100% loan product you can use on second homes and investment properties in addition to a primary residence.

MCC-This is similar to the TDHCA FTHB program listed above. These are a little more specific to your state. For more information on where you can find yours please contact me, or if you are a Texas REALTOR contact me for a full set of guidelines.

Seller paid DPA programs-This is the next frontier of home buying. The programs currently are not allowed but have been increasingly discussed in the last year. I believe as the government continues to pull out of buying mortgage backed securities your going to see this option come available soon. Ill keep you posted with developements.

I hope this information will help you on your journey to provide a full Buying/Selling experience to your clients. The greatest compliments I receive are thanks and praise for taking the time to educate my borrowers on whats out there to use at there disposal and especially the ones that may have had to wait quite some time to get into a home of their own, or possibly never would have had the opportunity to enjoy the American dream at all.

Thank you for reading. Good luck!

Best wishes,

Sean Thorson, Sr. Mortgage Banker, Envoy Mortgage sthorson@envoymortgage.com