The Low-Down on No-Down Loan Programs

Mortgage and Lending

With so many changes in the mortgage industry (sometimes on a weekly basis), it may seem difficult to stay on top of the latest guidelines.

To give you an update on the current "No-Down" options, here is a list of the main options available:

  • House America Program, My Community Program, or Flexible Program
  • FHA Loan with an approved down payment assistance program or approved secondary financing
  • VA Loan
  • Rural Housing Program

1.  House America, My Community, or Flexible Programs. These programs require two mortgages--an 80% first mortgage and a 20% community second lien. The community second lien may be sponsored by an agency of the state, local, or municipal government; a not-for-profit, 501(c) (3) corporation, a tax exempt religious organization, or the borrower's employer in the form of a grant, secured mortgage or unsecured mortgage, or structured for monthly payment assistance.

2.  FHA with approved down payment assistance or approved secondary financing. Down payment assistance programs such as Nehemiah are still available until September 30th unless congress acts to keep them alive. However, even after Sept. 30th, other options still exist, such as second lien loans from governmental agencies and family members. In fact, did you know that FHA allows 22 different funding sources for down payments?

3.  VA Loan. Either you or your spouse must be an eligible veteran. A veteran is a person who served in the active military, naval, or air service, and who, except for a service member on active duty, was discharged or released from active duty under conditions other than dishonorable.

4.  Rural Housing Program. This program is for certain borrowers who meet maximum income requirements and who purchase a home in rural areas as defined by the US Department of Agriculture. Depending on where you are searching, some areas may not be as remote as you might think. In Snohomish County, Arlington, Stanwood, and Monroe are examples of eligible areas. In King County, Duvall, Carnation, Fall City, Snoqualmie, and some parts of Maple Valley and Black Diamond are candidates. In Pierce County, Fort Lewis, Graham, Orting, and Bonney Lake are good possibilities.

Of course, other guideline requirements may apply; therefore, it is important to speak with a knowledgeable Mortgage Consultant who can guide buyers through their options.


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