If you are interested in purchasing a home with little to no money out of pocket, you’re still in luck. Today, there are multiple low and zero down mortgage programs widely available in the marketplace. Below we take a look at some of the remaining products available to borrowers with limited funds.
FHA Loans (low money down)
FHA mortgages have become increasingly popular over the past decade as more and more lenders eliminated their low money down financing options. These loans are insured by the Federal Housing Administration. This backing allows FHA approved lenders the ability to offer these programs without carrying as much risk. FHA loans do require some skin in the game. At the time this page was written, borrowers needed to put down at least 3.5% when using an FHA mortgage to purchase a home.
FHA streamline refinances give borrowers the opportunity to refinance without many of the costs and steps needed with conventional financing programs. Cash-out limits on FHA mortgage are also higher than most other mortgage alternatives. [Learn more]
VA Mortgages (zero money down)
VA loans are 100% mortgage programs for eligible active duty servicemen and women, veterans, and surviving spouses. The loans are guaranteed by the United Stated Department of Veterans Affairs and are available through VA approved lenders. VA mortgages can be used to purchase or refinance a home. VA purchase loans require no money down in most cases. VA loans can be used for both rate-and-term refinances (lowering one’s rate or shortening the term of the loan) and for cash-out purposes. Borrowers with VA mortgages may also take advantage of IRRRL refinancing. Interest Rate Reduction Refinance Loans are similar to FHA streamline refinancing where borrowers do not face as many costs and validation requirements as found with other conventional mortgage programs. [Learn more]
USDA Rural Housing Loans (zero money down)
USDA mortgages are no money down mortgages that are available to lower income borrowers in rural areas in the United States. USDA mortgage may be used to finance up to 102% of the appraised value or sales price of a home (whichever is lower). Other benefits of USDA financing include: sellers can assist with paying a buyer’s closing costs, little cash reserves are needed, and these loans are available in 30 and 15 year fixed rate terms. Unlike other low and zero down mortgage programs, USDA rural housing loans do have income restrictions. In other words, you can be disqualified for making too much money. [Learn more]
Fannie Mae 97% Conventional Loans (low money down)
Most Fannie Mae and Freddie Mac conventional loan programs require 5% down. Not so with Fannie Mae’s 97% product. This program requires buyers to put at least 3% down and the down payment must be based upon the home’s appraised value or purchase price (which even is lower). Borrowers can use this product to both purchase and refinance homes.
96.5% – 100% Mortgage Financing Highlights (the following terms do not apply to all programs):
- Flexible 97 – 100% Mortgage Financing Programs
- Creative Options to Finance Closing Costs
- No Money Down Mortgage with No PMI
- Fixed & Adjustable Rate Zero Down Mortgage Products
- Flexible Terms / Less than Perfect Credit Considered.
There are other low and zero money down mortgage programs and home buyer assistance programs available. We’ve tried to include a list of resources on the State Rate Tables on this site. Just got to the Search By State page and then click your state on the map for more information.
Please note that guidelines for the afrementioned programs change frequently. We recommend that you speak with a mortgage professional serving your area for the latest information and underwriting criteria. Also, please note that the rate tables on ForTheBestRate.com do not show pricing for these low and zero down home loan programs. You’ll need to reach out to the various lenders and brokers directly to find out if they offers these programs and to inquire about pricing.