May 18, 2017
There are mortgage loan programs that require zero money
down. If you’re a veteran or active duty and have at least 181 days of service,
you’re eligible for a VA loan which requires no down payment. USDA loans are
another government-backed mortgage program that doesn’t need a down payment yet
the property must be located in an approved rural area and there are income
limits on how much a household can make and still be approved. If neither of
these options work for you, there is another program that isn’t used very often
but should be if a no-down-payment loan is a requirement.
The California Housing Finance Agency, or CalHFA, was
created in 1975 and oversees their home financing and down payment assistance
programs for those who qualify. The programs are offered through approved
lenders. The “MyHome” program is an interest free loan filed as a subordinate
lien in the amount up to3.5% of the sales price and used in conjunction with a
CalHFA loan. The funds can be used for a down payment or closing costs. The
loan can be used to purchase a primary residence only and there are income
limits based upon which type of loan will be used. A homebuyer education
counseling course is also a requirement.
The CalHFA conventional loan program is a mortgage insured
with a private mortgage insurance, or PMI, in the current marketplace. The rate
is set by CalHFA and is fixed over the course of 30 years. Again, there are
income limits for this program.
An FHA loan can also be a path to a zero money down
mortgage. FHA loans allow for a financial gift from a family member or
qualified non-profit up to the amount of the required down payment of 3.5% of
the sales price plus closing costs.
If a zero-money down loan is a requirement your first step is
to speak with an experienced loan officer who will review your current
situation and evaluate a loan application. Most often however, after a
conversation with a loan officer you can find out about available programs that
will require as little money out of pocket as possible and how to qualify for
them. If a down payment is holding you back, there are options you may not be
For more information or questions about mortgage loans, please call (855) 757-8748.