If you’re ready to take a big step and buy a home, but haven’t saved enough for the traditional 20% down payment, there are mortgage options that may be right for you. First Mid offers several mortgage financing products that could get you into a home with less of a down payment.
A Rural Development Loan helps low- and moderate-income households buy a house by allowing buyers to finance up to 100 percent of the home’s value. Participants must meet income eligibility guidelines and the property must be located in eligible areas.
This program, through Freddie Mac, makes home buying possible for buyers with very low to moderate income. This program allows buyers to purchase with as little as 3 percent down payment and allows down payment funds to come from a variety of sources, including gifts. Home Possible also offers reduced mortgage insurance rates and premiums and even allows a variety of property options, as long as it’s an owner-occupied, primary residence.
This is a first-time homebuyer product, through Freddie Mac, that allows a down payment as low as 3 percent of the purchase price, and the down payment may be gifted from another source. This program does not have geographic or income restrictions; however, the property must be a single-family dwelling. The HomeOne Mortgage is a fixed rate mortgage with no pre-payment penalty, so it’s a great way for first-time borrowers to budget their home expense and still pay down the balance quicker – when they can afford to pay a little extra.
The Federal Housing Administration is a federal agency under the umbrella of the U.S. Department of Housing and Urban Development. An FHA Loan allows a down payment as low as 3.5 percent of the purchase price of the house. Plus, with more flexible credit qualifications than conventional mortgages, FHA Loans can help both first-time homebuyers, and those rebuilding their credit, more easily obtain home ownership.
Eligible veterans and their surviving spouses may be eligible for the VA to guarantee a portion of a loan obtained by a private lender, allowing the lender to provide more favorable terms.
Down Payment Plus
If you still need down payment assistance, you may qualify for the Down Payment Plus program. This program offers forgivable grants to assist with down payment and closing costs for households with qualifying income levels. Grants may be up to $6,000 and are forgivable after owning the property for a five-year period. Because this is a federally funded program, assistance is offered each year only while funds are available.
If you do not qualify for any of these products, ask us about conventional loans with private mortgage insurance.
To learn more about these options or for assistance with other types of mortgages, complete our online form to contact a First Mid mortgage lender in your area.