Saving for a down payment can be frustrating especially for first time home buyers. Only a handful of zero down loans are available since lenders are placing a greater demand on the home owner to provide a down payment. Here are loans available with a zero down payment.
USDA zero down loans are available to finance geographic specific homes. The home must be located within an eligible area as defined by USDA and are normally in rural areas. There are income limitations with the income determined by the County in which the home resides.
If your total household income is below $145,000, you may qualify for this zero down loan. The loan is used in conjunction with government or conventional loans. It is a second mortgage loan with no accrued interest and payments deferred for 30 years. The down payment loan amount is up to 4% of the total loan. By using this second mortgage you can leverage yourself into a home with virtually nothing out of pocket.
One of the advantages to this program is the benefit of having the entire down payment gifted to you from family members or from a very close friend making for a zero down payment loan. The amount to gift is 3.5% of the sales price.