RE/MAX Real Estate Guide and FAQ - Questions and Answers for Real Estate Mortgages and Financing.
RE/MAX Valley Real Estate, Boardman, Ohio

Real Estate Guide

Your Mortgage

 

RE/MAX Valley Real Estate

Real Estate News from Inman

RE/MAX
Valley  Real Estate
1006 Boardman - Canfield Rd.
Boardman, Ohio
(330) 629-9200

RE/MAX Real Estate FAQ - Buying Your Home, Working With A Real Estate Agent

Your Mortgage - Questions and Answers
'Low Down Payment Loans'

fadeline

What is a low down payment loan?
A low down payment is anything less than the standard 20 percent. Many people borrow with less than 20 percent down by obtaining private mortgage insurance, or PMI. There also are numerous programs to help first-time buyers with little or no down payment, including FHA, VA and Fannie Mae's Community Home Buyers Program.

Back To Top

Are there low-down-payment home loans?
A host of private lenders offer low-down-payment loans. In addition, there are government programs to help cash-strapped buyers. The U.S. Housing and Urban Development offers a variety of programs through the Federal Housing Administration that require approximately 4 to 5 percent cash down. Loan limits vary depending on the state and county where the property is located. Fannie Mae's Community Home Buyers program allows people to buy with just 3 percent down.

For details, contact lenders who offer government-insured loans. In addition to calling lenders for information, contact Fannie Mae directly at (800) 832-2345.

Back To Top

How do some of these low-down programs work?
Most of the private and government low-down loan programs have special requirements. These rules range from requiring borrowers to be first-time home buyers to limits on family income. In general, cities and counties require that borrowers earn no more than 100 percent to 120 percent of the county's average household income. However, some programs such as the Federal Housing Administration have no income restrictions on income and do not require the borrower to be a first-time buyer.

Many private low-down loan programs insist borrowers have good credit and also that they obtain private mortgage insurance, which is a small monthly insurance payment that insures the lender against default. Some of the city and county programs are available only in targeted neighborhoods where local leaders are trying to spark reinvestment or increase the homeownership rate.

Resources:

Back To Top

Who do I call for a low-down-payment loan?
Here are several popular programs available to home buyers, along with the appropriate telephone numbers for more information:
  1. The Federal Housing Administration has programs which require as little as 3 or 4 percent cash down. FHA loans are originated and serviced by private lenders. Check with local lenders to find the best source for your loan.
  2. Veterans (and reservists) who qualify can buy a home with no money down through the U.S. Department of Veterans Affairs. Call 1-800-827-1000 to find out more.
  3. Both the VA and FHA offer foreclosure properties for sale, some requiring as little as $100 down.
    1. Anyone interested in a VA foreclosure can call 1-800-827-1000 to request a current listing.
      Start your search here for VA Foreclosures in Ohio.>>
    2. For FHA- insured properties, call your local U.S. Housing and Urban Development office for more information. 
      Start your search for HUD Foreclosures in Ohio here.>>
  4. Fannie Mae helps buyers who can put down as little as 3 percent of their own money. To see if this can work for you, call 1-800-732-6643.

    See >> Fannie Mae Owned Foreclosures

  5. 100% financing is available through various agencies, especially: Nehemiah Community Development Corporation; Ameridream, Inc. - Down Payment Assistance Program, and Neighborhood Assistance Corporation of America (NACA).

    Note: As of 10/1/2008, HUD no longer permits DPA programs such as described above to participate in FHA insured loans or Fannie Mae and Freddie Mac finances loans. There is, however, legislation currently before our congress that would reinstate these programs.  (See: Real Estate Guide: Your Mortgage; No Money Down Loans)

  6. Many states, counties, and cities offer special housing loans or tax incentives in order to promote the benefits of home ownership in their communities. To find out what funds may be available to you, inquire at your local housing department or contact a REALTOR familiar with the area.
    1. In the Mahoning Valley contact RE/MAX Valley Real Estate.
    2. In Ohio See >>  Real Estate Guide: State and Local Programs

Back To Top

What is Fannie Mae's low-down program?
See -  Real estate Guide: Your Mortgage - Fannie Mae

Back To Top

How can Fannie Mae help a home buyer?
  See -  Real estate Guide:   Your Mortgage - Fannie Mae

Back To Top

Is PMI always required on low-down home loans?
   See -  Real estate Guide:  Your Mortgage - Private Mortgage Insurance for a complete discussion about PMI.

Back To Top

Where do I get information on PMI?
   See -  Real estate Guide:  Your Mortgage - Private Mortgage Insurance for a complete discussion about PMI.

Back To Top

Does the IRS allow a deduction for PMI for Federal Tax purposes?
   See -  Real estate Guide:  Your Mortgage - Private Mortgage Insurance for a complete discussion about PMI.

Back To Top

Are there alternatives to low-down-payment loans?
There are a variety of alternative financing arrangements such as equity sharing, employer housing assistance, seller- financing and lease options that may reduce the size of the down payment.

Back To Top

Do I have to disclose a parent's gift?
See -  Real estate Guide:  Your Mortgage - Parents Gifts and Loans for a complete discussion about PMI.

Back To Top

Should I put more or less down, if we can afford it?
There is no straight forward answer to this question and experts chime in on both sides.  Most advise that putting down as little as possible allows buyers to take full advantage of the tax benefits of home ownership.  Mortgage interest and property taxes are fully deductible from state and federal income taxes. Buyers using a small down payment also have a reserve for making unexpected improvements.

A few financial experts say however, that it would be more prudent to make a larger down payment if possible to reduce the amount of debt that must be financed. You may be able save far more in total interest than in tax deductions in the long haul.

See >>  Real estate Guide:   Home Buyers - Taxes

Back To Top

What about these ads for no-cost loans?
  See -  Real estate Guide:   Your Mortgage - No Cost Loans

Back To Top

Is there such a thing as a no-cost or no-fee loan?
  See -  Real estate Guide:   Your Mortgage - No Cost Loans

Back To Top

Can I get a HUD home for as little as $100 down?
  See -  Real estate Guide:   Your Mortgage - Federal Housing Administration

Back To Top