Many people fantasize about becoming homeowners, but despair at the thought of ever raising a full 20 percent down payment. The good news is that you don’t have to save the full 20 percent to buy a home. Here are some options to consider if you can afford mortgage repayments but don’t have the cash in the bank to put down 20 percent.
- FHA Loans
The Federal Housing Administration provides support for would-be homeowners who have good credit scores, but don’t have enough cash for a 20 percent down payment. With an FHA loan, you can get a mortgage with a down payment of as little as 3.5 percent of the value of the home. Everyone can apply for an FHA loan, but you should note that the lower down payment means that you’ll be facing higher monthly repayments.
- VA Loans
If you’re a current or former service member, you can apply for help from the Department of Veterans Affairs. This organization guarantees home loans with a small down payment or even no down payment for qualified veterans. Both fixed and adjustable rate VA loan mortgages are available and rates can be very competitive.
- USDA Rural Housing Development Loans
The U.S. Department of Agriculture is keen to encourage home ownership in rural areas. These loans can cover up to the full value of the home, which means you can buy even if you don’t have a down payment. If you meet the income and property requirements of a USDA loan, you could enjoy a 30 year fixed rate.
- MHDC Mortgage Revenue Bond Program
If you are a first-time buyer living in Missouri, you have an extra option to consider. The MHDC Mortgage Revenue Bond Program offers cash assistance for buyers who are struggling to cover down payments and closing costs for their first home. This program also gives Missouri first-time buyers access to below-market interest rates, so it’s a great option for those who are eligible. You can combine assistance from the MHDC program with FHA or VA loans to help you achieve your dream home.
Not having a 20 percent down payment in the bank is not necessarily a reason to give up on home ownership. There are plenty of programs that can help you — why not take a look at the options listed here to see if you qualify for assistance?