One of the reasons a lot of people don’t move forward and try to get a home is because they still think that they have to have at least 20% to put down. Sometimes there’s a reason to have more money down. Now we’ll answer the question, is 5% or less down more of the norm?
Do You Need 20% Downpayment to Buy a Home?
No – 3.5% or less has become the norm. It’s a golden opportunity – you can own a home with far less than 20% down. In some cases, you can own a home for zero down.
Prime Programs that Requires Zero Downpayment to Buy a Home
There are two primary programs, VA loan and USDA loan are two of the loan products that are out there.
What is a VA Loan?
VA loans are for veterans and military personnel. To qualify for a VA loan, you’ll get what’s called a certificate of eligibility and you can get with the Office of Veteran Affairs and have them run your DD-214. If it kicks back saying that you are not eligible, it tells why and it gives you the opportunity to correct that.
If you’re a veteran, active military, or anything along those lines, a VA loan is a great program and opportunity. It is truly zero down. No mortgage insurance. If you’re a veteran and do not own a home – reach out to an agent. It’s a phenomenal loan program.
What is a USDA Loan?
The USDA or the United States Department of Agriculture’s Rural Housing Service is another program that requires 0% down. USDA is also referred to as RD or rural development. They’re trying to give people an incentive to move to more rural areas.
USDA or RD is another true zero-down loan program. I highly advise it if you’re willing to live in rural areas such as Rockvale or Christiana or Westmoreland depending on what part you’re going just not in a major city, like Murfreesboro, Mount Juliet, or Nashville.
First Time Home Buyer program through THDA
A third option is to look into the First Home Buyer program through THDA (Tennessee Housing Development Authority). The name is really a misnomer – the program is open to anyone who has not had their name on the deed to a residential property in the last 3 years. They provide down payment and closing cost assistance of 6% of the purchase price. I am a preferred THDA agent so reach out and let’s see if this program is for you!
Are you thinking of buying or selling a home in the Nashville – Middle Tennessee area, call me at (615) 930-0313, schedule a call with me, or send me a message! I love helping people and using my financial and legal background to guide you in finding your dream home!
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