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Can first time home buyers find mortgages without down payments? The answer is YES! There are loans available for first time home buyer loans with zero down. You may be able to get a mortgage for the price you are paying now in rent. The two types of loans that fit this description are USDA rural development loans and VA loans.
Since a rural development mortgage funds 100-percent of the appraised value of a home, a buyer doesn't have to have a down payment. Sounds pretty simple. There are several life-changing factors that could come with a mortgage loan like this. Think about what a zero-down payment mortgage would do for you!
What do you think of when you hear "USDA Rural Development?" Do you picture a big red barn and a long white fence with horses and lots of acres at hand? It's the wrong picture. In fact, USDA rural development is not for farmers. It's not a mortgage loan option for buying a farm. Let's look at what this loan program is for in today's housing market.
The USDA has announced a great opportunity for homeowners with a rural development mortgage. This zero-down mortgage option is great for first time home buyers because of the 100% financing. With homeowners who went this route a few years ago, interest rates were decent - in the 8% range - but those rates have fallen near 4% now. The only problem is that in that same time period, home values have dropped so refinancing is difficult with no equity. Enter the rural development refinance program.
If you've already heard of the zero-down mortgage loan option USDA Rural Development, then you probably know the house must be in a specific area. As we've said here at AmeriFirst before, rural doesn't have to mean farm.