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How to Get a Low Down-Payment Home Loan

Find Out What You Need to Qualify for a Reduced Down-Payment

Home ownership is a dream that millions of Americans have. But sometimes it can feel like it's out of reach. After all, most of us don't have the entire purchase price of a home sitting in our bank accounts – we have to take out a home loan in order to buy our house. And securing a home loan means actually qualifying for it, which isn't always easy. A lot of factors will influence your ability to secure a loan with a low down-payment, but one that will certainly come into play is the need for a down payment.

Traditionally, major loans from Government Sponsored Enterprises like Freddie Mac and Fannie Mae will often require as much as 10% down – sometimes more depending on things like your credit score, debt to income ratio, and other factors. At best, most borrowers will be able to secure a loan if they have around 5% of the total purchase price of the home as a down payment. But there are a lot of other options worth looking at.

Primarily, the Federal Housing Administration can often help you get a lower down payment requirement. As long as you meet basic guidelines like good credit scores, you can often secure a FHA loan with only a 3.5% down payment. This alone is a big reason that FHA loans with low down-payment requirements are so popular, and why so many people elect to utilize them. However, there are some other choices as well that you might want to consider.

For example, for some borrowers it's possible to qualify for a home loan without even having a down payment. VA loans and USDA loans are available and require zero down payment. If you are trying to lock into a loan but don't have a huge down payment to make, here are some things that you should focus on instead.

  • Being a veteran will help you qualify for zero down financing. This is well worth it if you're a member or former member of the military, but others might have to look elsewhere. Research your eligibility on VA home loans before committing to a conventional mortgage. You may end up saving a lot of money.
  • Keep good credit. The better your credit score, the better off you'll be when applying for a home loan. Try to keep a credit score of at least 600, but 680 is much better when you want to reduce down payment requirements. Get the facts from subprime lenders that offer mortgages for people with bad credit.
  • Keep a low debt to income ratio, too. This is a huge factor in qualifying for a loan, and the better it is the easier it will be to secure a loan that is tailor-made for you – including one without a down payment requirement. We suggest using a mortgage calculator when determining monthly payments and comparing mortgage payments to your current housing expenses including your rent. Don't forget to include mortgage insurance, homeowners insurance and property taxes when comparing mortgage to a rent payments monthly.
  • Talk to a loan expert. This is probably the best step that you can take. A lending professional will be able to point you towards the absolute best low down-payment loan programs for your situation, whether that involves low down payments or some other factor. Shopping for home loan with a low down-payment is smart but start by talking with reputable mortgage sources that offer a variety of lending products.

If you can keep these basic points in mind you should be able to find a loan that will work for you. Down payments may be required, but there are numerous finance programs available that won't ask for the standard 5 or 10 percent.


First Time Home does not offer mortgages or direct financing. is a website that offers information about house financing and does not guarantee 1st time home mortgage programs directly or indirectly through representatives or agents. provides a news and information service by offering editorial content related to the housing and mortgage industry. This website has no official relationship with the Federal Housing Administration or the Department of Housing and Urban Development.

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