How to Buy a House With No and Low Money Down
Looking to invest in your primary residence, fix & flip, buy and hold rental, etc with low or no money down? Today, I’ve combined a quick and concise list of my favorite financing options depending on your location, income, credit and overall situation.
Who am I?
My name is Greyson Roberts and I am a Realtor in the greater Springfield Missouri area. These are my top recommendations I give to my clients, depending upon their personal scenario.
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Low and no money down loan programs and other financing methods
Here are the most common and beginner friendly way to get into real estate investing and/or home ownership with low or no money down! If you’d like a full in-depth video explanation of all of these methods, I’ll add the video I made at the end of todays blog. Hope this helps!
- Conventional
- Credit score of 640
- DTI under 43%
- 3% down minimum for primary residence (1-4 units)
- 20% + investments
- FHA
- Credit score of 580
- DTI under 43%
- MIP required, lowers cash flow
- 3.5% down minimum
- Must be owner occupied for one year 1-4 units
- Rental income of other units helps you qualify for the loan if maybe you otherwise wouldn’t
- VA
- You have completed at least 90 days of active duty service.
- You have at least six years of service in the Reserves or National Guard .
- You have served at least 181 days of active duty service during peacetime.
- You have 90 days of cumulative service under Title 10 or Title 32. For Title 32 service, at least 30 of those days must have been consecutive.
- You’re the spouse of a military service member who died in the line of duty, or as a result of a service-related disability. (Read More: VA Loan Eligibility for Surviving Spouses)
- USDA
- Restrictions apply
- Less than 33,000 in your cities population
- You must make less than 115% of the average annual income in that area
- Intended to help low income rural citizens get into home ownership
- Credit score of 640
- Similar conventional requirements
- 0% down potentially
- Single family only, no investments, no multi family
- Restrictions apply
- Hard money
- Much more lenient on requirements, more about the deal itself
- Not good for long term rentals unless you plan to refinance within 6-12 months
- Not good for primary residence unless you’re planning to refinance
- Good for homes in despair that need repairs. These homes won’t qualify for a loan otherwise and ideal for house flippers
- Private Money
- You can structure this deal anyway you want, you don’t have to follow government guidelines
- Normal loans get sold on the secondary market to ginnie mae and fannie mac, that’s why normal loans are so strict. Private money has unlimited potential
- You can get as creative as you want, just understand you don’t have to follow regulatory guidelines BUT expect it to be more expensive than traditional financing.
- Private money lenders are usually going to charge a higher interest rate and offer shorter terms, anywhere from usually 1-10 years but it’s totally up to you and your private lender.
- This would be best if you can’t otherwise qualify for a loan, or have a rich family member who wants to get into real estate without having to go through the normal process.
- This is best if you can refinance in 6-12 months.