According to a recent survey completed by Freddie Mac, almost a third of potential homeowners think they need to put down 20% or more as a down payment. Around 70% of survey respondents who are planning to buy a home said that a 20% down payment would delay their homebuying decision. Not enough first time buyers know for example they can put down as little as 3% to remove the monthly mortgage insurance “PMI” on a loan, or that they can buy a home with zero down. Here are 4 low down payment purchase programs you can use to help finance your first home.
Helping More First Time Buyers Obtain Home ownership
For many prospective homebuyers, saving for a down payment is the largest barrier to achieving the goal of home ownership.
Part of the challenge for those planning to purchase a home is their perception of how much they will need to save for the down payment.
While the overwhelming majority of those surveyed in the Freddie Mac report would like to purchase a home at some point in the future, their perception is that a larger down payment is required to buy a home, as almost a third of potential homeowners think they need to put down 20% or more as a down payment.
I believe that not enough consumers or First Time buyers know about the different low down payment programs available to help them buy a home, or programs that will even cover ALL of their down payment and ALL of their closing costs if needed.
Here are 4 low down payment purchase programs you can use to help finance your first home.
1.Buy a Home up to $500,000 with Only 3% Down Conventional Financing and No Monthly PMI.
With the new higher conventional loan limit of $484,000 available for buyers in California, a first time buyer can now purchase a home up to $500,000 with only 3% down conventional financing.
Buyers also have the option to eliminate the monthly mortgage insurance “PMI” from their monthly mortgage payment.
All of the down payment can be gifted too, so this is a great option for buyers to purchase right away if they do not have the down payment saved up yet.
Co-signers are allowed to help buyers qualify for a home purchase.
Only a 620 credit score is required to qualify for conventional financing.
Click HERE for more information on how to qualify for Freddie Mac’s New conventional 3% down HomeOne program with No PMI, there is a Q&A section included too.
2.Buy a Home up to $765,000 with Only 5% Down Conventional Jumbo Financing with No Monthly PMI.
If a first time buyer needs to finance a mortgage over the conventional loan limti of $484,350, they are eligible to use conventional jumbo financing up to a maximum loan amount of $726,525. This means a buyer can now purchase a home up to $765k with only 5% down.
Buyers also have the option to eliminate the monthly mortgage insurance “PMI” from their monthly mortgage payment.
Buyers in San Diego County can purchase a home up to $725,000 with only 5% down and No PMI.
Buyers in LA County, Orange County and SF County for example, can purchase a home up to $765,000 with only 5% down and No PMI.
All of the down payment can be gifted too, so this is a great option for buyers to purchase right away if they do not have the down payment saved up yet.
Only a 620 credit score is required to qualify for conventional jumbo financing.
Co-signers are allowed to help buyers qualify for a home purchase.
Click HERE for more information on how to qualify for the conventional Jumbo 5% down program with No PMI, there is a Q&A section included too.
3.Buy a Home up to $750,000 with only 3.5% Down FHA financing
FHA financing is a very popular program with first time homebuyers. With it’s easier qualification rules for buyers with less than perfect credit, the FHA helps many first time buyers finance a home that would not be able to otherwise.
The minimum down payment with FHA financing is only 3.5%. The FHA increased their CA conforming loan limit recently from $453,100 to $484,350, so this means a buyer can purchase a home up to $500,000 with only 3.5%.
In higher cost markets like LA, Orange Co and SF etc, a FHA buyer can purchase a home up to $750,000 with only 3.5% with a FHA jumbo loan.
In San Diego county, a buyer in San Diego can purchase a home up to $715,000 with only 3.5% down.
In Riverside and San Bernardino counties, a buyer can purchase a home up to $500,000 with only 3.5% down.
Only a 580 credit score is required to qualify for 3.5% down FHA financing.
Co-signers are also allowed to help buyers qualify for a home purchase.
Click HERE for more information on FHA loans.
4.Zero Down Payment Loan Program and Closing Cost Assistance For Buyers
If a buyer would like ALL of their down payment and closing costs covered to purchase a home, we have a terrific program available for buyers that combines a Conventional and CalHFA loan or a FHA and CalHFA loan.
Buyers can purchase a home up to $700k in certain counties with No down payment and No closing costs.
CalHFA (California Housing Finance Agency) offers down payment and closing cost assistance loan programs to help first time buyers purchase a home. A first time buyer is defined as someone who has not owned a home in 3 years.
This program is available with both conventional and FHA financing. CalHFA gives buyers a small 2nd mortgage up to 3.5% to help cover the minimum down payment due with conventional and FHA financing.
If buyers don’t have enough funds for their closing costs, CalHFA will give buyers an additional small 3rd mortgage of up to 4% to help cover ALL their closing costs. Many buyers using this program only have to pay the upfront appraisal fee out of pocket.
Payments on the CalHFA 2nd or 3rd mortgage loans are deferred for the life of the first mortgage. The terms are the same as the first mortgage. There are no payments due unless you sell or refinance.
Click HERE for more information on this program and examples of how you can purchase a $450k or $550k home with zero down and no closing costs.
If you have questions about any of these loan programs or you would like to get approved for one of these options above, just let me know.
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