By: Amy Gerrish
Navigating down payment assistance programs can be tricky. There are different programs for different areas, some expire, some run out of funds some are open ended. The network here at Home Program 101 has a lot of experience with a myriad of different city, state & federal programs. We picked 5 programs that are generally available in all states, but be sure to ask a Home Program 101 specialist in your area.
For 2015, these are our 5 favorite No or Low Down Payment Assistance programs:
1.) USDA Loan Program – This is a program that offers 100% financing. Yes, that means it is a $0 down. Combine this with a fabulous Home Program 101 Network Realtor that can negotiate the loan closing costs and you could potentially buy a house no money out of pocket. Eligibility factors include income, fico score, and location of the house you want to buy. This is a federal loan program that works great in rural areas, as well as some suburban areas that meet their requirements. This program does not work in cities or heavily populated suburban areas.
2.) Federal Housing Administration (FHA) – This is another federal home program which allows buyers to purchase a home with a low down payment option. They require a 3.5% down payment. On a $150,000 purchase this is a $5,250 down payment. Many people take advantage of their tax refunds & savings to get their down payment. FHA benefits are lower down payment, lower closing costs & easier credit qualifying than a conventional loan. Another benefit is that a mortgage on a $150,000 home is usually less than what people were paying in rent. Contact a Home Program 101 specialist in our network to see if this program is right for you.
3.) VA Programs – The VA helps active service members, veterans & surviving spouses attain home ownership. This is a wonderful program for our military and their families achieve home ownership with 100% financing. Again, another $0 down program. Our Home Program 101 network loves helping our military and has experience navigating the VA process.
4.) A 5% Down Payment Assistance Program- This program is available in most states in varying forms. You can combine this with the above FHA program. So of the 5% you get in assistance 3.5% can be used to cover the FHA required down payment. The remaining 1.5% can be used to cover some of your closing costs. Or, all 5% can be used for the down payment and you can have your Realtor negotiate closing cost to paid by the seller. With this program you have options! There are income & fico qualifications, so contact a Home Program 101 specialist in your area to see if this program works for you!
5.) FHA Program 99.5% Financing- This program is only available in 5 States. Arizona, California, New Mexico, Texas & Utah. This is fantastic low down payment program. On a $150,000 home you are coming to the closing table with a $750 down payment. As with the other programs you must meet the minimum fico & income requirements.
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