At the beginning of the 21st century, the prices of the average home were skyrocketing which gave home buyers “instant equity”. Many lenders offered zero down payment home mortgages to many of their customers knowing that they would soon have a significant stake in their homes. Then in 2008-2009 the bubble burst. In December of 2008 the housing index had the largest drop in American history. Home prices began plunging, Sacramento homeowners were left with little or no equity. Then the foreclosures began causing financial havoc on lenders. In turn they stopped offering zero down payment loans.
Four Government-Backed Loan Options With Zero Down Payment
As things have improved with the economy and the housing market a few zero down payment programs have been reinstated Here are four government backed loans that will help you purchase your Sacramento dream home with little to no money down. They include:
1. VA And USDA Loans
US government agencies sponsor both of these loans. VA (Veterans Affair) loans are available to any active duty or veteran of the Armed Services. They is no income limitations and can be applied throughout the US. USDA (United States Department of Agriculture) loan is for low income mortgage for rural and suburban homes. Like living in the country? This is the loan for you.
2. FHA Loans With Down Payment Assistance
The Federal Housing Administration (FHA) makes loans for low to moderate income families. The loan requires as little as a 3.5% down payment. With the help of the Housing and Urban Development (HUD) Secondary Financing program you can receive funding from HUD approved non-profit organizations that can bring your down payment to zero down.
3. Freddie Mac Loans With An Affordable Second.
Freddie Mac offers mortgage loans with down payments as low as 3%. If you have a low to moderate income you can then take out a Freddie Mac Affordable Second Loan. This loan covers the 3% and sometimes the closing costs. The interest rate cannot be more than 2% higher than the Freddie Mac mortgage. The funding must come from a non profit organization, the borrower’s employer, government agencies or regional affordable housing programs.
4. Fannie Mae Loan With A Community Second
A sister company to Freddie Mac, they offer a similar program, but Fannie Mae requires 5% down. They also accept a Community second. The funding must come from the same approved sources as Freddie Mac.
Other Mortgage Options That May Be Available
In addition to these four programs you may want to look around locally for lenders that are willing to provide a mortgage for zero percent down. It is important to keep in mind that these four programs are guaranteed by the government and probably are more stable than local programs. While not everyone may qualify they are a bonus to those who qualify and want to be a homeowner.
Owning a home of your own has always been the American dream. You deserve to live that dream. Even if you feel that buying a house is not an option for you as you don’t have thousands to put down, talk to the professionals at Professional Mortgage Associates. Our free consultation can help you review your requirements and provide options to help you find a home of your dreams.