How to buy a house with no down payment

In today’s market, it can both feel like it’s impossible to buy and also that now is the absolute time to buy thanks to the fear of the market only getting worse for first time buyers. With the common issues now facing the current home buying generation, it can feel impossible to save for that down payment to buy a house. That’s led many to think owning a home simply isn’t in the cards for them.

There’s good news as that’s often not the case. Many aren’t aware, but a down payment isn’t always needed to get off the renting treadmill and unto the ladder of home ownership. In fact, there’s even more than one way to approach this and here’s some options that might help you in becoming a homeowner.

VA Loans

While this doesn’t apply to everyone, it will be a real help for those who are active-duty, a current member of the National Guard, a reserves veteran or the spouse of a deceased veteran. These loans are backed by the Department of Veterans Affairs and are the perfect option to get into a home with no down payment for those who are able to qualify.

Typically in no (or low) down payment loans, there is mortgage insurance as part of the monthly payment for the new buyers. By going through the VA, there is also an option of paying a one-time fee of 2.3% of the value of the home opposed to the normal monthly insurance route.

USDA Loans

For those curious about government options outside of the VA, the United States Department of Agriculture can also help those looking for a home with no down payment. As expected, there’s a few stipulations here as well but unlike the VA loans, none of them have any requirement of a service history. These loans are offered in both rural and suburban areas but more city-like areas of the suburbs might not be applicable for this type of loan.

Another requirement is that the property is a single family home and not used as a working farm, but more importantly the household income cannot be more than 115% of the medium income for the location of the home. The potential debt-to-income ratio of those looking to buy also should be no higher than 45% to qualify.

Physician Loans

While not as common as the previous two options, medical professionals may also qualify for a no down payment option to help combat their larger than usual school loans. This is the perfect option for those in the lines of work such as dentists or surgeons who will have higher than average incomes but who are saddled with the typical debt that comes along with their profession.

For physicians, when looking at a house payment calculator online the number might seem more grim than they had expected. With that in mind, do remember that physicians don’t have to have private mortgage insurance in addition to potentially being able to qualify for the mortgage they were expecting all while not having to worry about the down payment.