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.