6 Ways to Buy a Home with Little to No Down

Are you looking to buy a home but have a very small down payment or maybe no payment at all?

This weeks episode of the podcast is a solo episode with Ron describing new and existing programs that can help you or your client get the home of their dreams! Learn what the programs may require, what types of programs are out there and how The Pippin Team can help you no matter what state you may live in. 

- Home Loan Program Types
- Grant Program Requirements
- 6 Different Programs Available Right Now

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Transcript

Ron Pippin: 0:00

This is agent versus lender.

Unknown: 0:04

Let's get ready to rumble.

Ron Pippin: 0:13

welcome to another episode of Agent Versus Lender and today, we have me, we aren't going to have another agent on with us today, because I have been getting a lot of phone calls lately about how to buy a home with little or no downpayment. And so let's just discuss that today. But before we start that, I do want to talk to you about the qualifying process for each of these programs. So some of these programs such as government grants, so we'll get into those in just a minute. But some of the government grants or some of the state bond programs, they will have a set of requirements to qualify for those government assistance programs. But then there's another set of requirements to qualify for the loan. So you have to qualify for both the the government assistance, and you have to qualify for the loan financing. So let's say let's say you have a credit score of, I don't know, a 520 credit score. So your credit, you know, there's some work to do on your credit. Though, you may though the bond program or not the bond program, but the the downpayment assistance or the government grant grant programs may not have a a criteria of a minimum credit score, the financing will. So just keep that in mind, as we're talking about these, there may be some some income limits, you may, you may not make enough money for the for the, for the qualifying of the loan, but you also can't make too much money to qualify for the grant. So there, but but there's other programs, I mean, there's some of the bond programs you can make over 100 grand. And there's some of the other programs that don't have those limitations. So just keep in mind that there, there may be some limitations on some of these programs. Okay, so just keep that in mind. If you have questions, just call me and we can go over some of that criteria. So first of all, since we mentioned government grants, let's talk about those. So government grants have, there are, there are many actually many government grants, and they can vary from state to state, they can vary from county to county, and even city to city at and so, so we, when we're talking, you can't just say hey, what grant Can I get, because most of the time, it's going to be dependent on where you are buying your home. So I'm gonna I'm in Utah, even though my company can help you in other states. Let's I'm going to talk about Utah specifically because, because that's where I'm at. So if we are in, in in Ogden, Utah, those grants may be different than you will then you'll have in Layton, there are different County, as well as Salt Lake or in Provo or in St. George, or over and Logan. So there are different programs depending on where you are buying. So and I've seen those grant programs run or have assistance programs from $1500, all the way up to$20,000. So they can be pretty significant. So don't overlook those at all. It's it's for sure, don't overlook those, I can really help you make a difference whether you're going to get into a home or not. So unfortunately, I can't go into all of those government grant programs because there are so many of them. But just know that they are there. And there's there's a lot of them. And some of you may qualify for and some of you may not qualify for and some of them then in some of the more popular populous areas may have a few more options than then something that's more rural. So if you have questions about those government grants, give me a call. And we can definitely help you go over some of those options. Alright, so another one said, we just mentioned rural, let's some rural areas. Let's talk about that one. So there's a program called USDA. And yes, it's the same USDA that stamps the meat USDA. So although completely different departments. There is still a USDA program so you have to live in what the government has deemed a rural area. And there's no money down required at all like, like zero. And we're going to get into closing costs here at the end of this, because we have to also consider closing costs. So we'll talk about that here in just a little bit. Now that that USDA program, it, even though it has to be something that's rural, the maps have been were drawn, like 12 or 13 years ago. So some of the areas that may be more populous now may still be considered rural, in the maps that they draw for the USDA program. So so I'm in Utah, so we're going to talk about that real quick. So something like Brigham city, Pason Utah, Eagle Mountain, some of those areas that really are kind of more populous now are still considered USDA and still considered rural. So you can you can use this program, which by the way, is, is a fantastic program, because the the mortgage insurance is also far less than some of the other programs. So help keep your payment down. And the interest rates are amazing. So it's, it's one of my favorite programs if we can, if you qualify for that area, it's an amazing program. And we love though, love that one. So So give me a call, if you want to give me a call on any of these. Okay, so the next one, that's, that's literally no money down required is if you're a veteran, or if you are in the military, or if your spouse has been in the military or has passed away, and you then you would have military benefits for the VA financing program. So there again, there's some criteria that goes along with that I just named some of that basically, you have to have been in the military, or, and or the National Guard or, you know, any of that any of the branches of the military. So the National Guard requires a little bit longer requirement to be in the National Guard than if you are an active duty. But if you were called into active duty while you're on the National Guard, then then actually the requirements much less as well. So so the VA, VA is an awesome, and there's no monthly mortgage insurance on the on the VA, so probably one of my favorite programs out of all of them. Alright, so I mentioned state bond programs a minute ago. So let's go to that one. So there are different state bond programs, most of them most of the states have them and and the way they do it, many of them require no money down is they will use a program such as an FHA or conventional program that requires three to three and a half percent down. But they finance that downpayment and even some of the closing costs on a small, small second loan. So that that's how he that's how you get in with with no money down. Because there's there's two financing. Don't Don't let the second mortgage thing throw you. Because a small, there's only a small amount on a second mortgage. And I know people go oh, second mortgage, but it's really just all the financing wrapped in all the all the the entire purchase price is just wrapped into financing. So call me about that one. It's really a great program. And don't let somebody scare you about hh, there's a second mortgage because it's really not as big of a deal as it sounds. Okay, so there's their state bond programs that that can help you again, now that one, that one has a criteria, there is some income limit limits, usually, but in Utah, like you can make, on some of them, you can make like 120 grand, or or maybe a little more. So so you can it's pretty liberal, you know, if you're if if you're making a lot of money, then is when I say a lot of money, I'm saying like 250,000, or probably 150,000 or more, you may not qualify for that program. Okay, so there's state problem programs and and there's, most of the states have them. So whichever state you're in, let us know and we can talk to you about that program. So another one is, is a gift funds. So if you don't have enough money for a down payment and or your closing costs, you can get gift funds. That means that somebody in your family that somebody is related to you, or even an employer, and I've had that happen, an employer has said, hey, we're going to give you some funds because we want you to stay here we want we want you to move here. So we're going to give you some or give you a bonus or give you something so that we can so we can help you get into a home so that so so that that works as well. And even if it's not a family member, if we can, if we can tie in, that they have a vested interest in you, then oftentimes, we can use that as gift funds as well. So there's another program. So get funds is another way to get into a home with no money down. So let's talk about some closing costs. So many of these programs are going to pay for your down payment or not going to require a down payment. But a few of them will help with the debt with the with the with the closing costs. And I want to talk about closing costs. If you don't know what closing costs are, there's cost to getting a loan, that means that you're going to there's an appraisal fee. There's usually an underwriting fee, there's title work that goes, that has to be done. And title is just making sure there's no liens or encumbrances on the property so that we know that you're getting a title to that property free and clear. And then we're going to set up an escrow account. And what that means is we're going to set aside money for you to pay for your property taxes and your homeowners insurance when they come due. So so all that stuff adds up. So we got to figure out how to pay for that. And, like I said, some of these programs will help you pay for some of those, but not all of them, and some of them won't even pay for all of them, or just will pay for a portion of them, or none of them. So we have to figure out how that comes. So one is you can have the seller pay closing costs, and which is a which is a great idea. So and there's ways to structure your your offer so that the seller is like oh, I'm not gonna say no, now I'm taking taking less for my for my house, but we can help you with that. So you can show that it's quite really not quite as bad as that sounds. So the sellers gonna win, you're gonna win, and and then you can get into home. So that's a real brief real fast overview of no money down programs. We are like experts like I this has been, this is what I've done. That's this is what I think a lot of realtors know me for some of the no money down programs. And, and so we are like really good at these. So call us, we can walk you through them, we can give you some options. And and I think that's going to do it for today. So appreciate you guys listening, hey, by the way, if if you have a chance, go go on to Google go on to wherever you're listening to this app, whether it's on YouTube, or Apple podcasts, or wherever you're listening to this. 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