95°F
weather icon Clear

Five mortgages that require little or no down payment

Homebuyers with little money for a down payment are finding more home loans available for a low down payment or even no down payment.

The Federal Housing Administration insures loans with small down payments, and private mortgage insurers have relaxed their down-payment requirements. It’s even possible to get a mortgage today with no money down. The nation’s biggest credit union offers “zero-down” mortgages. The Department of Veterans Affairs and the Department of Agriculture guarantee home loans with no down payments.

Following are a few options for borrowers seeking low-down-payment and zero-down-payment home mortgages.

No down payment: VA loan

The Department of Veterans Affairs, or VA, guarantees purchase mortgages with no required down payment for qualified veterans, active-duty service members and certain members of the National Guard and Reserves. Private lenders originate VA loans, which the VA guarantees.

There is no mortgage insurance. The borrower pays a funding fee, which can be rolled into the loan amount.

For purchase and construction loans, the VA funding fee varies, depending on the size of the down payment, whether the borrower served or serves in the regular military or in the Reserves or National Guard and whether it’s the veteran’s first VA loan or a subsequent loan.

The funding fee can be as low as 1.25 percent or as high as 3.3 percent.

For first-time purchasers making no down payment, the funding fee is 2.15 percent for members or veterans of the regular military, and 2.4 percent for those who qualify through service in the Reserves or National Guard.

No down payment: Navy Federal

Navy Federal Credit Union, the nation’s largest in assets and membership, offers 100 percent financing to qualified members who buy primary homes. Navy Federal eligibility is restricted to members of the military, some civilian employees of the military and U.S. Department of Defense and family members.

The credit union’s zero-down program is similar to the VA’s. One difference is cost: Navy Federal’s funding fee of 1.75 percent is less than the VA’s funding fees.

No down payment: USDA

The Department of Agriculture or USDA’s Rural Development mortgage guarantee program is so popular that it has been known to run out of money before the end of the fiscal year.

“That’s the cat’s meow, my favorite loan program,” says Jeff Tufford, mortgage consultant for Epic Mortgage Group in Grand Blanc, Michigan.

Some borrowers are surprised to find that Rural Development loans aren’t confined to farmland.

“It’s not all rural,” Tufford says.

The USDA has maps on its website that highlight eligible areas. In addition to geographical limits, the USDA program has restrictions on household income, and it is intended for first-time buyers, although there are exceptions.

The USDA mortgage comes from a bank, and there is no mortgage insurance. Instead, the USDA levies a 1 percent upfront guarantee fee, which can be rolled into the loan amount, and an annual guarantee fee of 0.35 percent of the loan balance.

Low down payment: Mortgage insurance

Qualified borrowers can make down payments as low as 3 percent with private mortgage insurance, or PMI. For most borrowers, PMI costs less than FHA mortgage insurance. But PMI has stricter credit requirements.

PMI has another edge over FHA: Once your mortgage balance is under 80 percent of the home’s value, you can cancel PMI. You can’t get rid of FHA insurance unless you refinance into a non-FHA loan.

Low down payment: FHA

With a minimum down payment of 3.5 percent, the Federal Housing Administration, or FHA, is the low-down- payment option that’s available to people with imperfect credit histories.

The FHA charges an upfront premium of 1.75 percent of the mortgage amount. On a 30-year loan with the minimum down payment, there’s an annual premium of 0.8 percent of the mortgage amount, or $800 a year for each $100,000 borrowed — $66.67 a month for a $100,000 loan.

Don't miss the big stories. Like us on Facebook.
THE LATEST
3 can make a quorum for HOA board

Let’s assume that you have a full board of five directors and at a duly noticed board meeting only three directors can attend.

Changes in law will affect how associations can tow vehicles

Senate Bill 212 was changed. It affects how associations can tow vehicles in the community. The existing law states that a vehicle may not be towed until 48 hours after affixing a notice to the vehicle that explains when it will be towed (with the exception of vehicles that are related to health, safety or welfare, i.e. parking in front of fire hydrants, etc.).

RESALE HOME SALES May 29-June 3

Editor’s note: Listings include the resale home’s parcel number. The address listed is the homebuyer’s mailing address and not the actual location of the resale home. About 90 percent of these addresses reflect the home purchase. Check the parcel number to make sure. Also, a few transactions do not reflect the market value of the homes. The information is provided by Accudata, a local research firm. For the complete listing, visit RJRealEstate.Vegas.

New Nevada laws that will affect HOAs

There were not too many laws passed in this last legislative session that affected our local homeowners associations. Here are some that did.

BHHS partners with Adwerx to offer Realtors new program

Berkshire Hathaway HomeServices Nevada Properties, in partnership with Adwerx Enterprises, has launched a new platform, called Brilliantly Simple to immediately advertise its real estate listings online. The platform automatically creates digital advertising programs for each home, including custom ads that are optimized for social media, apps and websites.

Homeowners have right to see HOA financial records

Per Nevada Revised Statute 116.31175 (1a), upon written request, you are entitled to receive financial statements from your association. Please send a formal specific request of what financial statements that you would like to receive.

High land costs affect developments

For all the job growth and expansion in the Las Vegas economy, a lack of land and its high cost is restricting growth in the valley, experts told the Southern Nevada real estate and development community.

Local home prices stuck at $300,000

For the third straight month, the Greater Las Vegas Association of Realtors, GLVAR, reported that local home prices are hovering at $300,000, while the number of homes on the market continues to increase.

Fair Housing Law requires accommodations for disabled

The Fair Housing Law requires accommodations for the disabled. Based upon your email, the homeowner would have a strong claim against the association if the homeowner was forced to remove the motor home, or if the association were to fine the homeowner because of the therapy equipment. Take the time to meet with this homeowner and see if there are any other viable alternatives.