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  • Writer's picturemhpaugusta

Home Buying Hack: How to buy a home with NO Money Down!





Everyone needs a place to live and buying a home is a significant milestone. The

financial requirements of putting down large sums of money to buy a home can be a

major barrier to making this dream become reality. I often get asked about first time

home buyer programs, and while there are not actually “first time” home buyer

programs, there are several options available for those looking to purchase a home with

no down payment. Essentially this would be any loan program that offers 100%

financing.



100% financing can be a great fit for some buyers and there are options that don’t

deserve all the negative scrutiny. I firmly believe that if you are going to have to pay rent,

and can qualify for a mortgage, you should buy a home.


You are spending the money regardless, if you are paying a mortgage, you are slowly

building equity, and that is valuable. If you are paying rent, you are building equity for

someone else.


This week we will explore various avenues that potential homebuyers can consider to

make their dream of homeownership a reality. These loans are not predatory in nature,

and are all great places to start if you qualify.


A quick guideline to help you identify whether you may qualify are credit and income

requirements. Most lenders require 1 year of consistent income source, a credit score

of at least 640 ( some 580-639 lenders do exist ) and no credit reported late payments

within the previous 12 months. Knowing these details up front should save you some

unnecessary heartache.


If you think you may meet this criteria, you could be aligned just right to use one of

these loans to start or upgrade your home ownership situation.


VA Loans: If you are a qualified veteran or active-duty military personnel, you may be eligible for

a VA (Veterans Affairs) loan. These loans often require no down payment, have competitive

interest rates, and no mortgage insurance fees. You will need a VA eligibility certificate to use

this program


USDA Loans: The United States Department of Agriculture (USDA) offers loans for rural

homebuyers with no down payment requirements. These loans are designed to promote

homeownership in rural areas. Locally, this loan can be used in Thomson, Graniteville, Harlem

and several other very popular communities. Check out the attached MAP, everything outside of

the tan marked areas may qualify for a USDA loan. USDA loans also have no mortgage

insurance fees added to the monthly payment.




FHA Loans: While the Federal Housing Administration (FHA) loans typically require a minimum

down payment, alone this is not a zero-down option, but this loan can be coupled with local

down payment assistance programs, which will in turn make it 100% financing. Some states,

cities, and nonprofit organizations offer down payment assistance or grant programs to help

homebuyers with their down payment or closing costs. These programs vary widely, so it's

essential to research what's available in your area, and know what it takes to qualify.


Gift Funds: If you have family willing to help you buy a home, they can give you “gift funds” for the down payment on several popular mortgage loans. Just be sure to follow any rules and regulations regarding gift funds set by your specific lender.


State and Local Bank Programs: Often local banks have mortgage funds that they committed to spend in their community. Locally, South State and Security Federal have some really great programs offering 100% financing. Just be aware that location and income limits may be tied to

these programs.


Before pursuing any of these options, it's crucial to consult with a seasoned real estate

professional and loan originator to understand the specific requirements, terms, and conditions

associated with each option. And just a reminder, your credit score and financial situation will

play a role in your ability to qualify for mortgage loans or assistance programs.

Now, who's ready to see if they can turn that rent money into something more rewarding??



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