Buying A Home With Zero Down Payment

Are you on the fence about a home purchase?  Is one of your concerns the down payment? I am here to tell you that there are mortgage options that allow for zero down payment.  You have a few options: 

1. VA Mortgage – yes if you served in the military you may qualify for a VA Mortgage that allows veterans to purchase a home with zero down payment.  The VA mortgage option is also nice because it allows for buyers to negotiate with the seller to pay all of their closing costs on top of the zero down payment.  This means that potential VA buyers could purchase a home with zero out of pocket.  
2. PHFA Mortgage – this type of mortgage allows for buyers to obtain a first and second mortgage to purchase a home.  This second mortgage would cover the cost of your down payment.  This does mean you would have two mortgages on your newly purchased home.  This mortgage option does have some restrictions on income based on your household size.  This mortgage option also allows for the buyer to negotiate with the seller to pay up to 6% of their closing costs.  Where this may not allow the buyer to purchase a home with zero out of pocket it does allow a buyer to purchase with very little money out of pocket. 
3. USDA Mortgage – this type of mortgage allows for a buyer to purchase a home with zero down payment.  This mortgage option has limitations on the location of the home and the buyers household income.  As a realtor we can check to see if a home you are interested in purchasing would fall in one of the allowable locations and qualify for this type of financing. This mortgage option also allows the buyer to negotiate with the seller to pay up to 6% of their closing cost just like the PHFA mortgage option.

I personally believe in having a good savings in the bank to allow you to cover the expenses of owning your own home as you want to be prepared for emergencies to arise but I felt it was important for buyers to know that they do have options to purchase a home even if you don’t have 20% down payment in the bank.  

There are other options that allow for smaller down payments as well and we can always put you in contact with a mortgage professional in our area that can discuss your personal situation and help you determine your best option.