Buying A Home Without A 20 Percent Down Payment

Dated: July 6 2018

Views: 376

I'm sure you heard or read when you started considering purchasing a home that you need a hefty chunk of change upfront. if you speak with your financial planner they will suggest at least 20% down in order not having to pay for (PMI) Private mortgage insurance. On an average home of say $300K, that is $60K. Most people do not have that kind of cash sitting in their bank account. But do you know, there are other ways to buying a home without having to put 20% down?? 

Federal Housing Administration Loans(FHA):

FHA loans require a down payment of only 3.5% compared to 20%. In order to be eligible however, you'll need a good credit score of at least 580. You'll have to pay PMI if your down payment is less than 20% and there are limits on how much you can borrow but they can be very helpful to those in particular buying their first home.

Veterans Administration Loans(VA):

If you or your spouse has served in the military, you may qualify for a VA loan. These loans require no down payment and unlike FHA loans no mortgage insurance since the Department of Veterans Affairs insures the loan. 

USDA Rural Development Loans:

The US Department of Agriculture also offers 0% down loans to home buyers who qualify as to having low or moderate income. Eligible properties are typically in rural regions where space isn't at a premium.  A full 97% of the United States is covered under USDA loans and you can check whether any address or area is covered at

State and Local Home Buyer programs:

The Federal government isn't the only one offering down payment assistance. There are 2,290 down payment programs across the country that offer financial assistance. These programs generally have income limits and require you to take a home buyer class. Check programs in your area at the National Council of State Housing Agencies website. 

Credit Unions:

Your credit union may offer you a mortgage with no down payment or a limited down payment. In order to qualify you'll have to meet limited income requirements - such as a maximum of 80% of the median area income and you'll need a decent credit score. 

To find help with a down payment in your area, start by speaking with your Realtor. Your Realtor can put you in touch with a lender or mortgage broker who can no only help you with how much you can afford but what programs and financial assistance you may be eligible for. 


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Jennifer Burns

Jennifer was born and raised in Maryland and for the last 21 years has resided in Middletown, MD. Upon finishing her studies at the University of Maryland University College with a Bachelors degree in....

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