Zero Down Home Loans First Time Buyers
One of the most sought after achievements by most US adults is the goal of home ownership. Reaching that goal represents a certain level of success. Owning a home represents a substantial asset that appreciates over time and has the potential to generate income. But getting the keys to your new home comes with challenges, which includes the need for a down payment. Many home buyers become
discouraged when faced with closing costs, moving expenses and the responsibility of a new mortgage payment. So how does one overcome all of these hurdles to realize the dream of owning their own home. The first step is to learn more about zero down home loans first time buyers programs using down payment assistance.
Fortunately, the age-old saying suggesting home buyers need a minimum of 20% as a down payment is misleading at best. A number of outlets exist to help home buyers reach their home ownership goals, without requiring large amounts of cash. Due to this demand, down payment assistance programs were created to lend a financial hand to first time home buyers.
In this post, you will learn how down payment assistance programs work, who best qualifies and the eligibility requirements.
How DPAs Work
Zero down home loans first time buyers down payment assistance programs offer a set amount of funding. In addition, assistance is provided with grants, interest-free loans or deferred debt to qualified home buyers. Each down payment assistance program limits how much assistance is available and the buyers that are eligible. In addition, program requirements vary in how much funding is available and if repayment will be necessary in the future. These programs are available through federal and state agencies and are powerful financial tools in securing your next home.
Each down payment assistance program includes specific criteria detailing who qualifies to receive funding help. Program qualifications vary greatly from program to program. Most DPAs restrict funding based on income, market value, loan amount or a combination of the two. Additionally, some states or lenders make DPAs available only to first-time home buyers; others allow the use of down payment assistance for current and prospective homeowners alike.
Qualifying for zero down home loans first time buyers programs differs, but eligibility requirements are similar across all programs. First, borrowers must be otherwise eligible to secure the financing necessary to purchase a home, based on the following criteria:
- Credit history
- Credit score
- Income, both earned and unearned
- Current debt obligations
- Low debt-to-income ratio
- Value of the property
Some down payment assistance programs may also require information about a borrower’s status relating to military service, disabilities or professions. The availability of funding may depend on other factors such as the location or energy efficient features of the home.
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