To buy a house with little money down, use government-backed loans like VA (0% down for eligible vets), USDA (0% down in rural areas), or FHA (as low as 3.5% down); explore conventional options like Fannie Mae’s HomeReady or Freddie Mac’s Home Possible (as low as 3% down); or seek down payment assistance programs (grants, loans, credits) and consider help from family or seller credits to cover costs.
Government-Backed Loans
- VA Loans: For eligible service members, veterans, and surviving spouses, offering 0% down payment options.
- USDA Loans: For homes in eligible rural areas, allowing 0% down for low-to-moderate-income buyers.
- FHA Loans: Backed by the Federal Housing Administration, requiring as little as 3.5% down with a 580+ credit score (10% for scores 500-579).
Conventional Loans with Low Down Payments
- Fannie Mae HomeReady & Freddie Mac Home Possible: Offer 3% down payment options, often with credits for first-time, low-income buyers.
Down Payment Assistance (DPA) Programs
- These programs, often state or local, offer grants, loans, or tax credits to help with down payments and closing costs, typically for first-time homebuyers.
- Check out Washington State Housing website https://heretohome.org/ for more information
Other Strategies
- Gifts from Family: Funds from relatives can cover all or part of the down payment.
- Lender Credits: Negotiate with the seller or lender to cover closing costs in exchange for a slightly higher interest rate.
- Rent-to-Own: A lease-purchase agreement where part of your rent goes toward a future down payment.
Key Steps
- Check Your Credit: Improve your score to access better rates and loan options.
- Contact a Lender: Find one specializing in first-time buyers or low-down-payment loans to explore options.
- Research DPA Programs: Search for local and state assistance programs in your area
