Mortgage Financing - Down Payment Options?

Question

Am looking for advice on down payment options other than the traditional 20%. We lost our business in 2018 and defaulted on an SBA loan. Although it was dismissed by the court we now appear on the governments CAIVERS report and underwriters won't approve us for a VA loan. Assume it's the same for FHA. Altogether I now make over $200K a year.

Does anyone have information on programs for obtaining financing (bank/mortgage company) that we don’t need the traditional 20% down?   We want to s

Make our first purchase in Pensacola Florida

Tim Hershberger · Answer

Thanks Matt.  That’s the plan, make it our primary residence as my work here in DC is going to continue telework into the future.  A lower down payment would then allow us to invest in other properties much quicker.  Will DM you for loan officers.  The realtor we started working with sent me a couple names but I can use all the information I can get.

Matt Jones · Answer

@Tim Hershberger as long as you plan to live there first there are several local lenders that offer a 0% down conventional loan including Renasant Bank, Rapid Rate Mortgage & Regions.  DM me if you need contacts for loan officers.

Tim Hershberger · Answer

Zack.  That’s great news.  I would love to secure a conventional loan at 5% or less.  That would get us into a place and free up a lot of cash to move on to house #2.  Like I said earlier the first would be a primary home (telework to DC is a real option) and we could start building an expanded portfolio more quickly.

Zack Karp · Answer

@Tim Hershberger the CAIVRS issue will keep you from VA and FHA.  That's a bummer.  Conventional may be an option.  You would need 5% down for a 1-unit (3% down if you haven't owned property in the past 3 years), 15% down for a 2-unit, or 20% down for a 3-4 unit.  There are no other traditional options with good similar terms.  Anything else will be way worse terms, if you can even find a lower down payment option via portfolio lending or hard money.

Best of luck!

Tim Hershberger · Answer

Appreciate the quick response.  We’ll have the cash for the deposit but it will limit the size of the house we buy.  Probably ok because we intend to use it for our purposes first and use it as a base (we are in DC) and then let our son use it for college (hopefully with roommates).   Just thought there might be some other options we weren’t aware of (I have been reading Brandon’s books 😀).

Landon Bleau · Answer

Tim, I would look to get creative on financing if I were in your shoes.  Look to partner with someone who brings money and credit to the table and you bring the deal and manage it, ask for seller financing, etc., just don't just think that's the only way to finance!