Looking for ways to overcome the hurdle of coming up with a down payment?
In Orem, Utah, many people save for years to get the keys to their dream house – and that isn’t always necessary. There are other options, and you might even be able to buy a home with no money down. Keep reading for a look at your potential pathways to homeownership.
See if You Qualify for a Zero-Down Mortgage
Currently, two government-backed loan programs allow eligible borrowers to buy a home with no money down:
VA Loans
Offered through the U.S. Department of Veterans Affairs, VA loans are available to U.S. military service members, reservists, veterans and their surviving spouses. Members of certain organizations, including Public Health Service officers and cadets at military academies, may also be approved for the zero-down VA loan program.
USDA Loans
Insured by the U.S. Department of Agriculture, USDA loans are available to Orem residents who would like to buy a home in an eligible area. These areas are largely non-urban or rural – however, properties in parts of Utah that are populated by less than 35,000 people may be within the guidelines for a zero-down USDA mortgage.
Look Into Down Payment Assistance Programs
If you aren’t eligible for a VA loan and don’t plan to buy a home in an eligible area for the USDA loan program, using a down payment assistance (DPA) program to cover your costs is an option. DPA funds can provide the money needed for a low-down payment mortgage, keeping you from having to come up with the cash.
The requirements for DPA programs vary, but since most are designed to help low- to moderate-income borrowers become homeowners, you’ll need to meet the earning limits. In addition, to qualify for down payment assistance, you might have to buy a property in a targeted neighborhood or agree to repay the funds if you don’t live in the home for a certain amount of time.
Low-Down Payment Mortgage Options
If you qualify for a DPA program, one of these low-down payment mortgage programs may enable you to buy a home in Orem, Utah:
- FHA loans, backed by the Federal Housing Administration
- HomeReady® mortgages from Fannie Mae
- Freddie Mac Home Possible® loans
- Conventional 97 mortgages
As Utah home prices rise, saving up enough money for the oft-quoted 20 percent down payment needed to become a homeowner is becoming more of a challenge. Fortunately, the options listed above require much less than that – FHA loans require just 3.5 percent down, and the other home loan programs we mentioned require only 3 percent.
Are you ready to buy a home in Orem, Utah? If you’d prefer to put little to no money down and you’d like expert assistance exploring zero-down mortgages, low-down payment home loans and all of your other financing options, contact Intercap Lending today.