- \n
- The minimum down payment is 3.5% of the purchase price.<\/li>\n
- The down payment can be gifted from an approved source<\/a>. It doesn\u2019t have to be your own funds.<\/li>\n
- The minimum credit score, with most lenders,\u00a0is 580.<\/li>\n
- Interest rates are lower than conventional mortgage loans in some situations.<\/li>\n<\/ul>\n
Most first-time buyers take advantage of FHA loans vs Conventional loans<\/a> as the FHA program has a smaller down payment required, and lower credit scores allowed.<\/p>\n
![\"self-employ-mortgage\"](\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2016\/11\/self-employ-mortgage.jpg\" "\\"\\"")
<\/p>\nVA Loan Program<\/h2>\n
The VA Loan<\/a> program is specifically for military veterans and people currently active in the military. I thinks it\u2019s the best mortgage program available, as it should be for those who\u00a0choose to serve our country.<\/p>\n
Related:<\/strong> 5 Harsh Realities About Real Estate Investing Every Newbie Should Know<\/a><\/em><\/p>\n
Here are some of the best things about this program:<\/p>\n
- \n
- There is no down payment required for this program. Yes, 100% financing is allowed!<\/li>\n
- Both veterans and people\u00a0active in the military qualify.<\/li>\n
- You can use your VA certificate of eligibility more than once<\/a>.<\/li>\n
- The interest rates are lower than conventional mortgage loans in some situations.<\/li>\n
- There is no minimum credit score requirement; instead, VA requires a lender to review the entire loan.<\/li>\n
- No PMI (private mortgage insurance) payment is required by the lender.<\/li>\n<\/ul>\n
Anyone that has served in the military should seriously look into the VA mortgage program.\u00a0 It allows no down payment and no PMI payment, which is the only mortgage program that allows both.<\/p>\n
The USDA Rural Development Loan<\/h2>\n
The Rural Housing program<\/a> is for home buyers looking in a rural area. This is one of the most popular first-time home buyer programs for anyone looking outside of a city area.<\/p>\n
Here are some of the best things about this program:<\/p>\n
- \n
- There is no down payment required for this program. Besides the VA program, it\u2019s the only other no down payment program.<\/li>\n
- The minimum credit score, with most lenders, is 640.<\/li>\n
- The interest rates are similar to the FHA and VA programs — lower than conventional mortgage loans in some situations.<\/li>\n
- This program doesn\u2019t have a PMI payment, but they have there own monthly fee. It\u2019s much less than the traditional PMI payment.<\/li>\n<\/ul>\n
If you are looking in a rural area to buy a home, it\u2019s best to look into this program. Since it\u2019s one of the only two no down payment programs, it\u2019s become very popular with first-time home buyers.<\/p>\n
![\"security-deposits\"](\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2016\/11\/security-deposits.jpg\" "\\"\\"")
<\/p>\nRelated:<\/strong> An FHA-Financed Duplex is an Ideal First Investment Property: Here\u2019s Why<\/a><\/em><\/p>\n
Conventional 97<\/h2>\n
The Conventional 97 program is another low down payment program that many first-time buyers use.<\/p>\n
Here are some of the best things about this program:<\/p>\n
- \n
- The minimum down payment is only 3% of the purchase price.<\/li>\n
- It\u2019s a conventional program, so the interest rates are going to be favorable like other conventional mortgages.<\/li>\n
- The minimum credit score, with most lenders, is 620.<\/li>\n
- It\u2019s a Fannie Mae<\/a> product, so it can be used with any Fannie Mae wholesale lender.<\/li>\n<\/ul>\n