Buying A Home With No Down Payment
Can you buy a house with no money down?
Yes, it is possible to buy a home with no money down or down payment. There are a variety of loans in the market that cater to home buyers with different needs. To qualify for a no money down home loan you will need to have a good credit score and credit record. The following are options available:
VA loans: These loans are available to past and present military personnel and their spouses.
FHA loans: These loans have a down payment requirement as low as 3.5%, but they allow you to use a gift payment for 100% of the down payment. The money can be gifted to you by family or friends.
USDA loan: these loans are known for their rural development objectives but they can also be used in suburban areas. Low and moderate income families may apply for USDA loans.
There are state and local first time home buyer programs that assist with grants for the down payment. A list of available grant programs can be found on the HUD Website.
A no money down home loan is attractive because it doesn’t drain your cash resources, but it has its downside. Without a down payment, you will have no equity in your home, you are starting at 0%, and so it will take longer to be eligible for home equity loans. You will also be extending the term of the loan.