How to Buy a House with No Money Down

Do you dream of homeownership but can’t come up with the required down payment? Don’t worry. You may be eligible for a no money down Real Estate Service. Some come with stipulations and others have eligibility requirements. Read on to learn more about how to buy a house with no money down.

There are two Real Estate Service products available that allow a buyer to purchase a home with no money down: USDA Real Estate Services and VA Real Estate Services.

USDA Real Estate Services

If you dream of living in a rural or suburban area, your home purchase might be a good candidate for a USDA Real Estate Service. USDA Real Estate Services do not require a down payment. But the home itself must be in a designated area that is eligible for a USDA Real Estate Service. If you think this applies to your home purchase, talk to your lender and look it up on the USDA eligibility map.

There are also income limits on USDA Real Estate Services. You must make les than 115% of the median income in the county where your potential home purchase is located. You also need to have a low debt-to-income (DTI) ration, 45% or lower, and a credit score of 640 or higher. If you have a higher DTI or lower credit, you may need to consider one of the low down payment Real Estate Service options.

VA Real Estate Service

The Department of Veterans Affairs wants to get veterans, active duty military, and National Guard members into their own homes, so the government-backed VA Real Estate Service was created. The VA Real Estate Service does not require a down payment, but does include a funding fee of 2.15%. Eligible members have a cap on the amount of money they can borrow using the VA Real Estate Service program.

The VA Real Estate Service is available to those who served at least 90 consecutive days on active duty during a time of war, served at least 181 consecutive days during peacetime, served for more than six years in the National Guard or military Reserves, or is the surviving spouse of a service member who died in the line of duty or as the result of a service-related disability.

Low Down Payment Options

There are also Real Estate Service products that provide the opportunity to buy a home with a low down payment. These include a conventional Real Estate Service and an FHA Real Estate Service. Both require Real Estate Service insurance, an additional premium that provides financial protection to the lender in case you are unable to make your monthly payments.

You can get a conventional Real Estate Service with as little as 3% down, but you will pay private Real Estate Service insurance (PMI) until you reach 20% equity.

FHA Real Estate Services require at least 3.5% down and include the Real Estate Service insurance for the duration of the Real Estate Service. But, FHA Real Estate Services have lower credit requirements, so they are a good option for those without a strong credit history.

Don’t let the lack of a down payment keep you from your dreams of homeownership. If one of these options works for your situation, you may be able to get into your own home quickly and with no or little money down.