How a First Time Homebuyer Can Buy a Home with No Money Down
-Some don't need the ocean view.
-Some don't need the 4-car finished garage.
-Some don't need the extra bedroom/home office.
-Some don't need the picket fence or landscaped lawn.
-Some do need their first home and don't have a down payment.
-Some do need a lender credit to help with closing costs.
-Some do live, or will live, in eligible census tracts.
-Some do believe in the American Dream.
If you've been conditioned to think that only eligible veterans can finance a home without a down payment, or if you've been told that in order to purchase a property without at least a 3% or 3.5% down payment, you need to obtain a grant, bond or other type of down payment assistance, you may also want to believe in the American Dream. The American Dream home loan, that is.
In it's best use, the American Dream loan allows a non-veteran buyer in certain price points and certain census tracts to purchase a home without a down payment. A 30-year fixed first mortgage will go to 97% of the purchase price and then U.S. Bank will provide a payment-free, forgivable loan for up to 3% of the price of the home (to $10,000 and sometimes this number will be a little higher or lower). Mortgage insurance (PMI) is lender paid, so the new owner doesn't have an additional monthly payment, and the American Dream program has a fixed rate as well.
There are some important things to know about the American Dream mortgage:
- The American Dream Mortgage is for first-time buyers only and the property must become the buyer's primary residence. No second homes or rental properties are allowed.
- The buyer's income must be equal to, or below, the median income in the area in which he/she intends to buy OR the property itself must be located in a low- or moderate-income census tract, in which case there is no income restriction for the buyer(s). One can quickly look up any address by following this link: https://geomap.ffiec.gov/ffiecgeomap/
- Buyers on the American Dream Mortgage must have a 640 minimum FICO score in most cases, however some of the credit guidelines are flexible and "make sense," in order to assist those whose credit profiles may be more recently established.
- Buyers must complete a course on homebuying, and we can provide a list of eligible programs. You don't need to go it alone!
- Buyers using the American Dream program must contribute at least $1000 of their own funds to the transaction.
Now I realize that this is a lot of information and that it might seem really stressful or intimidating to attempt to figure out if this program is a fit. Don't worry! I'm here to help answer any questions, so if you're currently renting and have decided you're ready to buy or if you're a real estate agent who has clients that might benefit from a low- or no-down payment option that differs from the ones with which you're already familiar, get in touch at any time!
Dream on!
Mortgage Loan Officer
NMLS: 22343
415-367-5959 Cell/Text
*The views and opinions expressed on this site about work-related matters are my own, have not been reviewed or approved by U.S. Bank and do not necessarily represent the views and opinions of U.S. Bank. In no way do I commit U.S. Bank to any position on any matter or issue without the express prior written consent of U.S. Bank's Human Resources Department.
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