If you’re considering buying a home, you may be wondering how much money you’ll need for a downpayment. Here you will find everything about the Minimum Downpayment for Purchase Loans to buy according to the type of transactions.
Can you buy a house with 0% down payment?
Yes. It is possible to buy a house without a down payment, the various options are mentioned below.
Today, you can buy a home with no down payment if you qualify for a VA (Veteran Affair) or USDA (US Department of Agriculture) loans. Only active military members, veterans, and certain surviving spouses of veterans are eligible for VA loans. USDA programs are mortgage loans for homes in eligible rural and suburban areas. Both VA and USDA loans are guaranteed with no downpayment, but must meet minimum requirements established by USDA and VA.
Another option to buy with 0% downpayment is to apply for a Downpayment Program Assistance, allowing you to pay all expenses and close the property with $0. For more information about these loan programs in Florida, I recommend reading this article.
The amount you need for a down payment comes from the type of loan you choose. Some of the minimum down payment requirements will also arise if you are buying a primary residence, a secondary residence, or an investment property.
Down payment requirements for your primary residence (or main home) may vary. It depends on the type of loan you are applying for and your personal financial situation.
- Conventional Loans: the minimum down payment on these types of loans is 3%, while obtaining an Approv/Eligible in the Desktop Underwriter (DU).
- FHA Loans: 3.5% is the minimum down payment for FHA loans if the credit score is above 620. If the score is 580 to 619, the minimum down payment is 10%.
- VA Loans: You do not need a down payment to qualify for a VA loan.
- USDA Loans: Like a VA loan, you don’t need a down payment to get a USDA loan. However, your home must be in a rural or suburban area to qualify, and your household must also meet certain income requirements.
- Bank Statement Loans: These types of loans have a minimum down payment of 10% depending on your credit score.
Note: For Condominium type properties, the minimum down payment is 25% if the Association cannot be approved by Fannie Mae. Multi-family properties have a minimum down payment of 25% for Conventional loans, with the exception of Home Possible which allows entry with 5% but income limits apply to be approved, check your local income limits for more details.
A second home is a residence that you intend to occupy in addition to your primary residence. It can be a vacation home or a property that you visit frequently.
For these types of properties, the lowest possible down payment is 10% through the Conventional program. FHA, VA and USDA loans do not allow you to finance second homes.
Investment properties are real estate that you buy to earn a return on your investment, either through rental income, future resale of the property, or both.
- Conventional Loan: If you plan to buy an investment property, Conventional offers you a minimum of 15% down payment. FHA, VA and USDA loans do not allow you to finance investment properties.
- Hard Money Loans: For short-term investments such as Fix & Flip loans. the minimum down payment is 20%. Sometimes a 10% could be approved but the investor must have an excellent history of investments in Real Estate.
A 20% down payment is no longer required to buy a home. It’s possible to buy a home with as little as a 3% down payment, and you can even buy it with no down payment if you qualify.
If you are interested in a loan and need more information, do not hesitate to contact me, you can call me or write me on WhatsApp or through my contact page and I will be ready to assist you.