Yes that’s right you can still buy a home with no down payment. You can use financing to pay 100% of the purchase price of the home if you have little cash for closing.
Here is how you do it.
Any where in the USA look around find a home that you like then plug it into this website. http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do When the site loads click on single family housing under the property eligibility tab on the right side of the screen. It will tell you if your choose of home is eligible for 100% financing.
Does this mean you need no money at all?
No you still need money you need to pay for your closing cost. Some banks charge an upfront loan fee. Some banks use this to pay for nothing others use it to pay for your appraisal. Some charge nothing upfront but hit you on the back end. That is another topic for another blog. You will have your fee for home inspection. If you pre-pay this fee it can not be add into closing cost.
Can you come to the table with very little money yes. How with this type of loan you can get up to 6% seller assist at this point. So if your looking to buy a $100,000 dollar home in Pennsylvania let’s say and you have a 1% transfer tax and your pre-paying taxes and depending on the time of the year you close you could be paying a large about the pre-paid taxes back to the seller if he or she just paid the taxes for the next year. You could be looking at 7 – 8,000.00 dollars in closing cost if you can get up to $6,000 from the seller then you still would have to come to the table with up to 2,000 dollars. That is much better then coming to the table with $8,000 dollars for closing cost and 3.5% down money with an FHA loan. now your looking at up to $11,500 dollars in cash from borrow at the table if you go with the FHA route.
Now with the FHA at this point you can still get up to 6% sellers assist from the seller to off set some of the closing cost. So don’t fret there are no down payment options out there still. Just remember that you may still have closing cost to pay if the price of the home is on the lower end of the price range.