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Buying a Home with Less Than 20% Down

We are often asked by prospective clients if they will be able to purchase a home with less than a 20% down payment. The answer is a resounding YES! If the only thing keeping you renting is the fact that you don’t have 20% or more of the anticipated purchase price of your home saved yet, don’t let that deter you from your dreams of home ownership. There are many loan programs available on the market today to borrowers in nearly all income brackets – and many of these loan programs have competitive terms for borrowers with less than perfect credit.

FHA loans

FHA loans are home loans which are guaranteed and backed by the federal government’s Federal Housing Administration. These loans have a down payment requirement of just 3.5% of the estimated purchase price of the home. Additionally, FHA loans often feature lower interest rates than you’ll find with a conventional mortgage loan product.

USDA Loans

The federal Department of Agriculture has a program which is aimed at increasing home ownership rates in rural and less populated areas. If a bigger backyard and room to roam is what you are looking for, USDA loans offer attractive and competitive features, including no down payment requirement.

VA Loans

If you are an active-duty service member, a veteran or the spouse of a veteran, the federal Department of Veterans Affairs’ VA loan offers home loans with very little down, and in some instances with no down payment required. VA loans may be used more than once (i.e., they are not just for first-time homebuyers) and you may be able to use a VA loan on an investment property.

Home Ready Program Loans

Fannie Mae’s new program Home Ready is designed to encourage home ownership in minority-led and low-income areas. Home Ready requires just a 3% down payment, and unlike conventional loan products, the income of household members who will not be a party to the loan may still be considered to meet income eligibility guidelines. This program is available to both low and moderate income borrowers, as well as higher-income borrowers who are buying property in low-income areas.

Competitive and unique loan terms

Some lenders will offer special loan terms to borrowers who are income or credit-worthy. Some lenders have unique programs which will waive a private mortgage insurance requirement if you put down 10% or more of the estimated purchase price of the home. Call your local lender today to find out what mortgage loan products and programs you may qualify for.

Today's Low Rates

PROGRAM RATE APR
30 Year Fixed 3.875% 3.93%
15 Year Fixed 3% 3.06%
5/1 Arm 3.5% 3.672%
All rates shown with 0 points
Assumptions

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