home loans with less than 20 down

First Time Home Buyer

Options for Home Loans with Less than 20 Down

Saving money for a downpayment to buy a home can be challenging when you have other expenses to pay for like a car payment, rent, or student loans. But the good news is, you may not have to save as much as you think. All too often, first-time buyers assume that they have to put down 20% to buy a home. But this actually isn’t true. There are several options for home loans with downpayment requirements of less than twenty percent. Programs like the USDA loan program and FHA home loans can help individuals with low to moderate income become homeowners sooner in life and reduce the financial barrier to homeownership. 


Options for Low Downpayment Home Mortgage Loans

In a perfect world, saving enough money to put twenty percent down on a home and avoid PMI would be possible for everyone. But in reality, the world we live in is far from perfect. It’s messy and complicated. Sometimes, life gets in the way, and waiting to buy a home until you have 20% down isn’t practical or even possible for everyone. The good news is, you don’t have to let this stop you from becoming a homeowner.

There are plenty of home loan options that require less than twenty percent down. This includes VA loans, USDA loans, and FHA loans. You may even be able to qualify for a conventional loan and still put down less than twenty percent.

Here are some popular types of home loans with relaxed downpayment requirements:

  • FHA Loans:  FHA loans are insured by the Federal Housing Administration (FHA). These loans are designed to help individuals with lower credit scores or limited down payment funds to become homeowners. With an FHA loan, borrowers can put down as little as 3.5 percent.
  • VA Loans: If you’re a veteran, are actively serving in the U.S. military, or are the surviving spouse of a military veteran, you may be able to qualify for a VA loan. VA home loans are mortgage loans guaranteed by the Department of Veterans Affairs. Individuals who qualify can become homeowners without putting any money down (zero percent).
  • USDA Loans: USDA home loans are mortgage loans guaranteed by the U.S. Department of Agriculture (USDA) and are primarily designed to help low-to-moderate-income borrowers purchase homes in eligible rural and suburban areas. USDA loans are also 100% financing and do not require any money down.


Chat with an Expert to Explore Your Options

If you’re interested in learning more about home loans with relaxed downpayment requirements, give us a call. Our expert staff will be more than happy to assist you!