Zero Down options for buying - is there anything left?

With all the changes happening, it's become more difficult for buyers to get approved with little or no money down.  However there are 4 good options left to help you take advantage of this market even if you don't have a lot of $ saved. 

1. VA - The last great true no money down.  If you have served in the military you may be eligible for buying a home with no money down.  If you qualify, the government basically guarantees a portion of your loan.  That way, the lender knows that if you don't make your payments, they'll still get their money back.  Another benefit is that there is no Mortgage Insurance (MI) and rates are almost as low as standard 20% down financing. 

2. FHA - If you haven't been in the military this is an good low down option for you.  FHA only requires that you bring in a 3.5% down payment.  They are also very liberal about credit scores and help from family.  FHA does require an Up Front Mortgage Insurance Premium and a monthly MI fee.  The UFMIP can be rolled into your loan and the MI is much lower than standard conventional MI.

3. Down Payment Assistance - There are several good programs out there that will help you with a down payment on your home.  Now this is an entire conversation unto itself because all the programs are different in how they qualify you and what they expect in return. Qualifications typically require you to be buying in a particular area, have a middle to low income status, or be part of a certain group of ethnicity or profession.  The payback expectations range from no payback at all, to balloon payments or shared equity.  If you find one that fits your needs they can be extremely beneficial.

4. 5% down -Conventional Financing -  We thought this one was gone.  However, we've recently identified a lender that is still willing to lend up to 95% of the home's value all in 1 loan.  This is rare and it must be a house you plan to use as your primary residence.  This program also requires MI, but can be just as effective as the FHA products. 

   All these programs have advantages and disadvantages.  For example, sometimes sellers are hesitant to accept Down Payment Assistance, VA or FHA programs because of the baggage they carry.  There are more restrictions and potential delays than standard financing.  so it's important that you, your Realtor, and your Mortgage Planner all work together to determine the best strategy for helping you buy a new home.