No Money Down Home Purchase PDF Print E-mail

There are a variety of home mortgage loan programs available that provide 100% or more for the purchase of a new home. There are a multiple ways to structure these deals to meet the needs of each individual home buyer.

100% Financing is when the lender secures a mortgage loan for you that is equal to the full purchase price of the home. In many circumstance, the lender can also arrange for you to receive more than 100% on a home purchase, providing you with extra money for closing costs and other fees that are often associated with a new loan.


No Money Down Home Loans

Generally for purchases, the loan amount is capped at 103% or 107%. The extra 3-7% can be used for attorney fees, lender fees, appraisal fees, and sometimes can be used for origination fees. Applicants often have to prove they have access to some liquid reserves, but they don't always have to use their reserves in the transaction.

Some programs require the borrower to contribute as little as $500 to the home purchase and/or costs and fees.  Often underwriting requirements a little more strict if you are getting a loan of over 100%.  Even with a loan amount of 103% or more, in some instances, there may be some costs and fees that the lender requires the borrower to pay. Your loan officer will work with you to try and reduce or eliminate as much of that out-of-pocket money as possible.


Seller Concessions

One way to get extra money contrubted for you during a home purchase without borrowering more than 100% is to negotiate seller concessions in your purchase contract.  Seller concessions are when the seller contributes a percentage of the purchase price towards your closing costs or other fees.  Some lenders and underwriters will only allow seller concessions to pay for specific things, so check with your loan officer about specific requirements.  Under some circumstances, it might make more sense to ask for seller concessions instead of getting a loan amount of greater than 100%.

Keep in mind, most lenders will not allow you to finance more than 100% of the purchase price and receive seller concessions.  Usually you can only receive one or the other.

Down Payment Assistance

You may qualify for special down payment assistance depending on your geographic area, income, employment, or state and local programs.  These programs vary widely, but in some cases a third party or government program will be allowed to pay for some/all of your closing costs or downpayment.  Qualification and program availability varies, and not all lenders will allow down payment assistance with all programs.  Check with your loan officer.

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