We have been taught that when you see something that seems too good to be true, it usually is. Most of the time this is the case,however, this one is REAL! You see the advertisements about how you can buy a home with $0 money down, but you hear the media talk about how hard it is to get financing. How can this be? Is this just a bait and switch ad? No, it is very true and I will prove it!
Below is a snapshot of a settlement sheet from a recent closing that occurred on November 28, 2011. This is not from the days of yesteryear where we had what I like to call “mirror test underwriting”. You know, when the mortgage company would hold a mirror under your nose, and if it fogged up, you were approved for a mortgage! Those days are gone, but great financing options still exist, you just need to follow the rules of the program.
As you can see from the snapshot, the buyer put down $1000 with the offer to purchase. After the down payment, closing costs, and all taxes and insurances were paid, they GOT BACK $700. They bought this $230,000 home for only $300!!! Holy crap! So how did they do this?
There is a mortgage program available to first-time homebuyers, or families that can prove they have outgrown their current home, that provides 100% financing. It is referred to as the Rural Housing Program provided by the U.S. Department of Agriculture. As the program name suggests, the property you purchase must be located in an area that the USDA considers rural. To see a map of the areas that are eligible, click here.
Next, there are income restrictions. Depending on the amount of people living in the home to be purchased, you have to make less than the limit that they specify. So those of you making a ton of money every year, you will not be eligible. However, most individuals will fall into this range easily! To see if your income qualifies, click here.
Now that you know where to buy a home to qualify, and you meet the income limits for the program, you should take the next step to contact a mortgage company that offers the program. They will make sure that your credit is above the 580 credit score requirement and let you know what amount of home that you may qualify for. Not all mortgage companies and banks are approved to offer this program, so feel free to contact me for a list.
This is when you can start shopping! I have already set up an ongoing search criteria to look for all of the homes that qualify for this program. You can start viewing these properties immediately by visiting my Zero Down Homes for Sale page. You should be able to find a property out of the 737 currently available today.
So what are you waiting for? Prices are down, interest rates are low, and you do not need any money. Hmmm, maybe you should get started today!