Home buyers are typically advised to put 20% down for a mortgage. If you can’t come up with that amount of cash it’s not a problem. We’ve created a USA specific list of programs that allow you to buy a home with no money down (Canadian list coming in future posts).
#1 USDA Loans
The U.S. Department of Agriculture (USDA) offers a zero-down mortgage for low to moderate-income families. This program is only eligible for homes purchased in smaller towns with a populations of 10,000 or less and was created to help rural development. The USDA program covers more than 97 percent of the United States with many eligible smaller towns located right outside major cities.
This program was designed for first-time home buyers and as a rule USDA loans do not require mortgage insurance. There is, however, an upfront guarantee fee of one percent but you can choose to roll this fee into the loan amount.
#2 VA Home Loans
If you are a veteran, in the National Guard and Reserves or an active-duty service member, then you may qualify for a VA home loan. The VA offers 100 percent financing. So, you won’t need any money down, in addition these loans do not require mortgage insurance. There is, however, a funding fee, which must be paid by the borrower but just like USDA loans you can roll the fee into the loan amount. The funding fee is typically 2.15 percent of the loan amount.
#3 Navy Federal Credit Union HomeBuyers Choice Program
If you are a first-time home buyer and a member of the Navy Federal Credit Union, then you could qualify for this program. The maximum loan amount is approximately $453,100, but the exact amount varies depending on the location of the home.
Jumbo financing is available up to $1 million. And Just like the aforementioned programs this loan does not require mortgage insurance. In addition the 1.75% Funding Fee can be waived with a .375% increase in the mortgage interest rate.