Saving for a down payment is a big step when you’re looking to buy a home. So can you buy a house with no money down?
The answer is maybe.
There are a few loan options that allow buyers to skip making a down payment, although there are stipulations. Here are a few ways how to buy a house with no money down:
VA loan
If you are an active-duty servicemember, veteran, or qualified spouse of a deceased veteran, you may qualify for a VA loan. While there are several qualifications for this loan, it’s a good option for buying a house with no down payment. You are able to pay a nominal funding fee in lieu of mortgage insurance. Besides being a veteran or active-duty, home buyers using a VA loan are frequently required to have a certain credit score.
USDA loan
USDA loans are available to those who want to buy in certain rural or suburban areas. Other than location, the home also must be single-family, your primary residence, and not a working farm. There are also financial qualifications. Your combined household income cannot be higher than the 115% of the median income of the county you purchase in. There are also credit and debt-to-income ratio qualifications.
Non-profit loan
There may be programs available in your area that allow you to purchase a home with no down payment. One example is NACA, or the Neighborhood Assistance Corporation of America. This program offers its lowest interest rate and no down payment mortgage to low- to moderate-income buyers and communities. However, its services are also available to buyers with a higher income purchasing in certain areas. Buyers must live in the home for the length of the mortgage and become involved in the NACA program. NACA and other non-profits are a great way to buy a house with no money down.