Two of the most popular mortgage loans for first-time buyers are the USDA Rural Development loan and the VA (Veterans) Home Loan. The main reason these two loans are so popular is because both loans allow you to purchase a home with very little or no money down (also known as a Zero Down or No Down Home Loan). Zero down home loans are most common among first-time homebuyers since they are typically young married couples or single professionals who are just starting out, and haven't yet saved enough financial resources to fund a down payment.
At AmeriFirst, we specialize in both USDA Rural Development and VA Home Loans.
Here is a quick overview of the first-time homebuyer loans with zero down:
USDA Rural Development Loan
The USDA Rural Development Loan is offered through the U.S. Department of Agriculture. With this loan you can borrow up to 100% of the appraised value of the home, and in some instances, up to an additional 2% more that can be used for small repairs or improvements. One of the main requirements of the USDA loan is that the subject property must fall within a specific geographical location that is outside a city/metropolitan area.
To find out if a particular property falls within the USDA required area, visit the U.S. Department of Agriculture website.
VA Home Loan
The VA Home Loan (Veterans) is another popular Zero Down Payment Mortgage offered by the Department of Veterans Affairs. Signed into law back in 1944 by then President Franklin D. Roosevelt, the Servicemen's Readjustment Act (GI Bill of Rights) offered veterans a federally guaranteed home loan with zero money down. There are some very specific eligibility requirements in order to qualify for a VA home loan so be sure you visit the U.S. Department of Veteran Affairs website for more details. You can also reach out to one of our friendly loan officers at a branch close to you.
Even though both of these loan products are first-time homebuyer loans with zero down, there are still some out-of-pocket expenses when buying a home, i.e. earnest money, and home inspection. Make sure you have enough money saved up to cover these Buyer costs.
Learn all about the first home buying process with our "Get Mortgage Ready Kit." The free eBook has a ton of information including a glossary of mortgage terms to help you be a more powerful and educated buyer.
(cash picture derived from: Flickr user Andrew Magill)