How to Buy a Home Without Having Any Money Saved Up

Written by Posted On Monday, 29 February 2016 05:36

If you're looking into becoming first time home buyer in Florida, home ownership might look like a distant dream. 20% down payments require immense savings just to get a mortgage, and the paperwork itself can feel pretty intimidating if you're never done it before. Let's take a look at how you can buy your first home without actually having to save any money for a down payment, and minimizing additional costs.

Get an FHA loan

A normal down payment costs around 20% of the home's purchase price. For an average house that means you would have to have over $20,000 in your bank account before you could even think about getting a house. Luckily, that's why the Federal Housing Administration offers FHA loans to low and middle income families. An FHA down payment can be as low as 3.5% of the purchase price of a house, which is already much more manageable. 

However, this article is about how you can get a house without saving ANY money for a down payment, and to do that you're going to need to use a down payment assistance program.

Get Down Payment Assistance

Down Payment Assistance is any of a number of support programs that offer financial support for your down payment. These can come in the form of a no-interest loan, or often in the form of a "loan" that doesn't need to be paid back at all provided the buyer lives in the home for a specified amount of time. Federal, state, and local governments and some non-profits offer these kinds of programs, and they all come with slightly different rules that you'll need to learn about on a case-by-case basis.

Typically these will cover the remaining 3.5% of your down payment, up to a specific cap. Often the funds can also be used for additional expenses like closing costs.

The way you qualify for these is often by qualifying as a low or middle-income resident, or by qualifying as a "good neighbor" for a program of the same name. Good Neighbor programs are designed to help teachers, public servants, and members of the military get settled into their own homes, and are often designed to help stabilize shrinking or run-down neighborhoods.

 

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Michael Olsen

Michael Olsen is a writer for MortgageGrants.com which helps people find mortgage grants and down payment assistance programs for first time homebuyers in Florida

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