Down Payment Myths
One of the oldest pieces of advice homeowners hear is that you need at least 20% down to buy a home.
But this isn’t your grandpa’s housing market anymore.
As home prices keep going up, being able to save 20% down can be harder and harder for the average first-time buyer. Luckily, today’s buyers have a variety of options for down payment assistance and some loan programs that require little to no down payment at all.
Down payment assistance can consist of state, local, or federal grants and loans, or private organizations like charities. Down payment assistance is usually based on factors like your income, the location of the home, and the purchase price of the property. Many local or state grants, for example, have maximum income requirements.
The low down payment program you’re probably most familiar with is the FHA loan program, which allows buyers to take out a federally-backed mortgage with a minimum down payment of 3.5% (at the time of this blog post). The USDA loan program requires no down payment, as long as the applicant lives in an eligible rural area and meets other income restriction guidelines.
While down payment assistance programs are usually for first-time buyers, there are still options available if you’re already a homeowner. You may even be considered a “first-time buyer” if you haven’t owned a home in more than three years.
Wondering if you qualify for down payment assistance or a low down payment loan program? Contact one of our savvy Minute Mortgage loan officers today; they can help answer this and any other questions you may have before and during your home-buying journey!