How to Buy a House With No and Low Money Down

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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
  • 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.