3 Tips For Buying A Home With Very Little Money

Real Estate Agent with RE/MAX Realty Group

3 Tips For Buying A Home With Very Little Money

There are tons of people out there who'd love to purchase a home but don't have much money saved.  Often these people believe that they have no shot at buying a home.

There are actually many ways to buy a home with very little money, possibly even with no money!  It's very important when trying to purchase a home with very little money down to understand the PROs and CONs of buying a home with little money down.

Below we're going to discuss 3 great tips for buying a home with very little money. If you're looking for some ideas and ways to buy a home without a boatload of money, the following tips will be very helpful!

1.) Local Grant Programs

Depending on where you're looking to purchase a home will depend on the type of local grant programs that are available.  It's a sure bet that in your local area there are some fantastic grants available for buyers, especially first timers.

For example, there are some excellent first time home buyer programs in Rochester NY.  There are programs for first time home buyers that are available through the City of Rochester, the Federal Home Loan Bank of NY, and SONYMA.

If you're unsure whether there are local grant programs available, consult with a local real estate professional or a local mortgage lender.  They'll be able to help you explore all of the local grant programs that might help provide assistance in covering down payment and closing expenses.

2.) Low/No Down Payment Mortgages

Many buyers aren't aware that there are some excellent mortgage products that require as little as 0% down.  There are also many products that require a buyer to come up with as little as 3.5% down!  

Below we're going to discuss a few of the most popular low or no down payment mortgage products to consider when trying to buy a home with very little money!

  • FHA Home Loans - FHA, which stands for Federal Housing Administration, is one of the most popular mortgage products for buyers who have very little money saved.  The FHA loan allows a buyer to contribute as little as a 3.5% down payment.  FHA home loans also offer some fantastic mortgage interest rates as well.  To get more information on FHA home loans, check out this resource on the benefits and drawbacks of FHA mortgages.
  • VA Home Loans - Another fantastic mortgage product for buyers with very little money saved is the VA mortgage.  VA mortgages offer mortgages that allow a buyer to finance 100%.  The VA loan also allows buyers to get assistance with covering the closing costs from a seller.  For some additional information on VA loans, check out this awesome resource on which explains 15 VA mortgage facts!
  • USDA Home Loans - If you're thinking about buying a rural home and don't have much money saved, the USDA home loan might be the perfect fit!  Administered by the United States Department of Agriculture, this mortgage product again allows a buyer to finance 100%!  The USDA home loan does have restrictions as to where a home has to be located in order to be eligible.  Check out the USDA eligibility tool to find out if the area you're looking to buy a home in is eligible!

3.) Ask For Seller Concessions

Last but certainly not least, another fantastic tip for buying a home with very little money is to consider requesting seller concessions when negotiating for a home. 

Seller concessions, which are also referred to as closing cost credits, are a very important real estate term buyers and sellers should be aware of.  A seller concession can be simply explained as a monetary contribution from a home seller to the potential buyer that helps cover their closing costs and down payment.  

Depending on the type of mortgage product a buyer is obtaining will determine the amount they can receive in closing cost credits.  For example, FHA home loans allow a buyer to receive up to 6% of the purchase price.

It's important when buying a home with very little money available that you understand exactly how much you can get in seller concessions.  Also, keep in mind that as you're attempting to negotiate for seller concessions that a seller isn't required to agree to providing them.  

If a seller is willing to contribute towards a buyers closing costs, they need to understand they may need to offer more than the asking price to help offset the concession they're making.

Final Thoughts

One of the most important thing to keep in mind when attempting to buy a home with very little money is that it CAN be done.  Having an experienced real estate professional can make all the difference.

For nearly 7 years, working as a Rochester NY real estate agent, I've helped dozens of home buyers purchase a home with very little money available.  Buying a home with very little money definitely takes some creativity but with the proper guidance, again, it CAN be done!

Other Helpful Home Buying Resources

Chuck Mixon
The Keyes Company - Cutler Bay, FL
Cutler Bay Specialist, GRI, CDPE, BPOR

Great article Kyle.

Aug 18, 2017 07:19 AM
MadisonMortgageGuys .com
MadisonMortgageGuys - Oconomowoc, WI
Your local mortgage company serving 47 states!

Solid tips Kyle Hiscock. All 3 mortgage programs listed are excellent options for borrowers that have little to no down payment! 

Aug 18, 2017 07:21 AM
Kat Palmiotti
eXp Commercial, Referral Divison - Kalispell, MT
Helping your Montana dreams take root

And there are even conventional loans that will accept a 3% down payment. Great info for home buyers!

Aug 18, 2017 07:33 AM
Kyle Hiscock
RE/MAX Realty Group - Rochester, NY
Licensed Real Estate Salesperson, Realtor®, e-PRO®

#1 - Thanks Joe Boylan !

#2 - Appreciate the compliments Chuck Mixon !

#3 - Inlanta Mortgage - Madison - There are some fantastic mortgage products for buyers with very little money for sure!  Thanks for stopping by!

#4 - Yes the 3% down conventional is another awesome program Kat Palmiotti especially for buyers with exceptional credit scores but not a ton of money saved!

Aug 18, 2017 07:37 AM
Anita Clark
Coldwell Banker Access Realty ~ 478.960.8055 - Warner Robins, GA
Realtor - Homes for Sale in Warner Robins GA

As always, excellent advice that will help buyers as they progress through the home buying process. Nicely done, Kyle.

Aug 18, 2017 08:57 AM
Kyle Hiscock
RE/MAX Realty Group - Rochester, NY
Licensed Real Estate Salesperson, Realtor®, e-PRO®

#6 - Thank you Anita Clark 

Aug 18, 2017 08:58 AM
Bill Gassett
RE/MAX Executive Realty - Hopkinton, MA
Metrowest Massachusetts Real Estate

Excellent article Kyle Hiscock !

Aug 18, 2017 12:27 PM
Kyle Hiscock
RE/MAX Realty Group - Rochester, NY
Licensed Real Estate Salesperson, Realtor®, e-PRO®

Thanks Bill Gassett !

Aug 21, 2017 06:11 AM
Michael J. Perry
KW Elite - Lancaster, PA
Lancaster, PA Relo Specialist

It is important for Buyer agents to learn about the different types of Financing out there and not be totally dependent on Mortgage Originators ! 

Aug 23, 2017 05:05 AM
Kyle Hiscock
RE/MAX Realty Group - Rochester, NY
Licensed Real Estate Salesperson, Realtor®, e-PRO®

I couldn't agree more Michael J. Perry !  Part of being a real estate agent is advising and making sure a buyer is pointed in the right direction.  If an agent recommends a buyer to a lender who doesn't offer a program that really is a good fit for them, they are doing them a huge disservice!

Aug 23, 2017 05:08 AM
Matthew Klinowski, PA
Downing Frye Realty - Naples, FL
Naples Golf Guy | Find Your Dream Lifestyle

Great tips Kyle! Hope people take advantage of them.  Have a good weekend.

Aug 31, 2017 05:57 PM
Kyle Hiscock
RE/MAX Realty Group - Rochester, NY
Licensed Real Estate Salesperson, Realtor®, e-PRO®

Thank you Matthew Klinowski!

Sep 01, 2017 04:25 AM
Debbie Reynolds, C21 Platinum Properties
Platinum Properties- (931)771-9070 - Clarksville, TN
The Dedicated Clarksville TN Realtor-(931)320-6730

Hi Kyle, These are 3 resources that will help the low budget buyer get in a home. Nice post. Thanks so much for following my blog.

Sep 07, 2017 07:37 PM
Roy Kelley
Retired - Gaithersburg, MD

This is excellent advice to share with prospective home buyers.

Sep 08, 2017 05:14 AM
Sheila Anderson
Referral Group Incorporated - East Brunswick, NJ
The Real Estate Whisperer Who Listens 732-715-1133

Good morning Kyle and welcome to the Rain. Your post is focused, well written and targeted. Nice job.

Sep 08, 2017 05:41 AM
Nathan Gesner
American West Realty and Management - Cody, WY
Broker / Property Manager

It's important to let buyers know that there are other options available. Great blog!

Sep 08, 2017 06:26 AM
Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher

Doing big things with very little money is very appealing to a lot of people out there in the world. Very interesting

Jan 17, 2018 10:47 PM
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Oct 30, 2018 01:47 PM
Inna Ivchenko
Barcode Properties - Encino, CA
Realtor® • GRI • HAFA • PSC Calabasas CA

Unfortunately, it is not easy to buy these days of multiple biddings with low downpayment, contingencies and longer closing time. 

Jan 29, 2022 08:39 PM
Kristin Johnston - REALTOR®
RE/MAX Platinum - Waukesha, WI
Giving Back With Each Home Sold!

Great post!  Thanks for sharing and enjoy your day!

Jan 31, 2023 07:28 AM