No Down Payment Mortgages

no pmt

No-Down-Payment Mortgage Options

  1. VA Loans
      • Eligibility: Military service members, veterans, and surviving spouses
      • Down Payment: None required

     

    • Insurance: No private mortgage insurance (PMI) requiredno pmt
    • Fees: Funding fee of 1.25% to 3.3% of the loan amount, based on down payment and prior VA loan usage
  2. USDA Loans
    • Eligibility: Lower-to-moderate-income buyers in eligible rural areas
    • Down Payment: None required
    • Insurance: Annual fee of 0.35% of loan amount for the life of the loan
    • Fees: Upfront guarantee fee of 1% of loan amount (can be financed into the mortgage)
  3. Physician Mortgages
    • Eligibility: Medical professionals with high debt-to-income (DTI) ratios
    • Down Payment: None required
    • Special Feature: Allows for higher DTI ratios
  4. Gift Funds
    • Eligibility: Varies by lender
    • Down Payment: Entire down payment may be covered by gift funds from family or friends

Low-Down-Payment Mortgage Options

  1. Fannie Mae and Freddie Mac Loans
    • Programs: Conventional 97, HomeReady, Home Possible, HomeOne
    • Down Payment: As low as 3%
    • Insurance: Requires PMI until reaching 78% loan-to-value (LTV)
  2. FHA Loans
    • Eligibility: Borrowers with credit scores of 580 or higher (or 500 with higher down payment)
    • Down Payment: 3.5% (for credit scores ≥580) or 10% (for credit scores 500-579)
    • Insurance: Upfront mortgage insurance premium (MIP) of 1.75% of loan amount and annual MIP
  3. Good Neighbor Next Door Program
    • Eligibility: Teachers, law enforcement, firefighters, and EMTs
    • Down Payment: Low or none (with a discount)
    • Special Feature: Up to 50% discount on qualifying home prices

Pros of No-Down-Payment Mortgages

  • Buy a home sooner without saving for a large down payment
  • Keep cash on hand for emergencies, remodeling, or investments

Cons of No-Down-Payment Mortgages

  • Limited or no home equity initially
  • Potentially higher interest rates due to increased lender risk
  • Larger mortgage amounts, resulting in more interest paid over time
  • Additional fees (e.g., VA funding fee, USDA guarantee fee)

Are you eligible for any of these programs,? This could be the start of owning your own home!

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