Many potential homeowners today are searching for ways to get into a home with no money down and no out-of-pocket expense. There are several ways to accommodate this type of buyer, if they are unable to come up with FHA's 3.5% minimum required down payment.
USDA loans are typically designed to assist in rural development of geographical areas, and help buyers with low to moderate income. Most people don't realize though that USDA isn't just for rural areas, and because of this a surprisingly large number of homes and counties qualify for this type of financing. A quick way to determine if a home would be USDA eligible is to go here. In the left hand column under Property Eligibility, click on the 'Single Family Housing' link.
From there you can either input the home address, or click on the map of the United States. If the home you are interested in is eligible, or you are willing to move into an eligible area, then you would next need to determine if you meed the annual income requirements.
To determine the income restrictions, one would return to the USDA eligibility webpage found here. In the left hand column under Income Limits click on the 'Direct' web link for Single Family Housing. Next select the State you are buying in and review the limits by county.
USDA puts restrictions on total annual income coming into the home based upon how many people will be living in the new home. For example, if a married couple has three children, one of which is employed, the total household members would be five. Even if the employed child is not on the loan, their income still counts towards the maximum allowable household income.
USDA does allow for deductions such as daycare expense, medical expense, medical care, etc. to stay under the maximum allowed annual limit.
FHA offers 100% financing with only $100 down through their HUD home program. These are homes that currently have an FHA loan on the property and have been foreclosed on. HUD will typically allow concessions to cover the Buyer's closing costs and completely eliminate the 3.5% required down payment. A Real Estate Agent will be able to locate any HUD homes in your area eligible for this type of financing.
All eligible members of the military may purchase a home with 100% financing. The loan amounts are calculated when the Veteran receives their Certificate of Entitlement. This certificate determines their current eligibility amounts and may be used several times. VA loans are very cost effective for the buyer and waive the monthly mortgage insurance most other loans require.
Down Payment Assistance
Almost every county has some type of Down Payment Assistance programs. Each program is unique and offers different qualifying criteria. Some will cover the down payment completely and closing costs, while others may require a small amount of the buyer's funds at closing. ResMac has several county down payment assistance programs, and we recommend calling for specific information on your county.
For more information on 100% financing options available to you, please call 800.917.7002 or email us at firstname.lastname@example.org. We look forward to working with you in the financing of your new home.