What’s the minimum “Down Payment” required? – Depending on the type of mortgage loan you’re qualified for a down payment can be as low as 3.5% of the property purchase. If you’re a Veteran in good standing, VA Loans have a no down payment option. Keep in mind you’ll still need to qualify for the loan with credit score, debt-to-income ratio and there will be closing costs and so forth. If you qualify and choose to put less than 20% down payment, you’ll have to purchase private mortgage insurance (PMI), except VA Loans which are backed by the Veterans Administration so there is no PMI. Your loan officer/consultant will advise you of the details in PMI. We’ll share more about PMI and the right down payment in future newsletters.
What is “Down Payment Assistance” (DPA)? – DPA’s are government assistance programs that can provide up to 5% (presently in Reno/Sparks) of the purchase price for your home. You’ll need to qualify so talking to a loan officer/consultant is key to planning your finances. In many cases, if you stay current on your loan and meet all the requirements, you won’t have to pay back the DPA loan (Wow, free money!). Many DPA programs can be used for closing costs and are geographically specific. It should be noted that some DPA’s are available for buyers that used to have a home and have passed the required waiting time. Here’s the link to the most popular DPA programs:
Down Payment Assistance Programs:
What’s important to remember:
- These programs can and will change! They can even be unavailable at times.
- Qualifying for a DPA is tricky. Be sure to talk to a professional loan officer/consultant. They are trained in the latest rules and regulations.
- If you qualify and follow the rules and regulations, these loans can be forgiven. That means you don’t have to pay them back. Be careful, as one mistake can be costly.
