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Real Estate

How can I Buy a House with no Money out of Pocket?

The down payment is one hurdle that keeps most people from buying a home. What if there are ways to buy a home without any money out of your pocket?

It may sound too good to be true, but it’s possible.

Today there are loan programs available that don’t require a down payment or allow for a gift as a down payment.

USDA Loans

If you buy a home in a rural area according to the USDA boundaries, you don’t need a down payment. 

If you are eligible, you can buy a home without a down payment.  Some lenders offer no-closing cost loans in exchange for a slightly higher interest rate.

VA Loans

If you’re a veteran of the military or active duty, you may be able to purchase a home with no money down. The VA loan provides 100% financing and has some of the most flexible underwriting guidelines. 

Like the USDA loan, you can ask the seller to cover the closing costs or take a slightly higher interest rate and take a no-closing cost loan.

Gift Money on Traditional Loan

If you aren’t eligible for the USDA or VA loan, there are still other options. If you have a family member or employer who will provide gift funds to buy a house, you can use the funds to offset your down payment and/or closing cost requirements.

Both the conventional loan and FHA loan allow borrowers to use gift funds for 100% of the down payment. You’ll need to document the funds and prove they are a gift (and not a loan).  Your lender can walk you through the steps required.

Other Low Down Payment Options

There are also low down payment options that require much less than the traditional 20% down payment.

FHA loans require just 3.5% down and you don’t need perfect credit.

If you have good credit (or at least decent), you may also qualify for a conventional loan and can put down just 3% on the home.

Buying a Home with No Money out of Pocket is Possible

If you think outside the box, you can buy a home with no money out of pocket. We can help you exhaust all of your loan options so you know how to move forward. The down payment shouldn’t be the reason you don’t buy a home. Today some options help you become a homeowner and we’re here to help!