Low Down Payment Mortgage Options | Eric Jeannette

Eric Jeanette/Dream home financing

The economy has taken its toll on home buyers in the United States. With rising prices for consumer goods and fuel, many homebuyers have seen their savings dwindle. As a result, the need for low down payment mortgage options is more real today than ever.

Low down payment mortgage options

The following mortgage programs offer the lowest down payment available

FHA Loans – The FHA loan requirements are extremely flexible for homebuyers who have lower credit scores and a small down payment. FHA loans are very popular and are the second mortgage program after conventional loans. Here are the basic FHA requirements:

  • 2 year work history
  • 3.5% deposit
  • Credit scores of at least 500
  • You must be able to fully document your income
  • The accommodation must be your main residence

FHA loans also allow for high debt to income ratio up to 56.9%.

VA Loans – If you are a veteran, active military member, or spouse of a veteran and are eligible for VA, you may consider a VA loan. Here are the basic requirements for a VA loan:

  • 2-year work history or VA disability benefits can be used to qualify
  • Zero deposit
  • No minimum credit score requirement
  • 1.75% financing fee at closing that can be financed
  • No recent bankruptcy or foreclosure

If you are VA eligible, this will be a great low down payment mortgage option for you.

USDA Loans – USDA loans are for people who are planning to buy a home in a rural area and are limited in their ability to provide a down payment. This is also a zero down program and here are the basic requirements:

  • 2 years work history required
  • There are income limits per county
  • No deposit required
  • No recent bankruptcy
  • No PMI required
  • No credit score requirement

A USDA loan is an excellent home ownership program which you should consider if you are planning to buy in a rural area.

For VA and USDA loan options, there are no specific credit score requirements. However, most lenders have their own minimum credit scores and it can be difficult to find someone who can help you if your scores are below 600.

When shopping for a mortgage or lender, you should also pay close attention to improve your credit scores. The higher your scores, the lower your interest rate will be.

Down payment assistance

If you are going to need down payment assistance, you will need to research these programs in your state or community. Most programs also have a minimum credit score requirement, which is another reason to focus on improving your credit scores.

Your down payment assistance plan will require you to obtain a pre-approval letter from your lender. They want to make sure you are able to qualify for a mortgage before providing you with the funds to use for buying a home.


Ultimately, there are three low down payment mortgage options out of which at least one should be right for you. Each has its own advantages and ability to get you into your home with little to no down payment.

About Matthew R. Dailey

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