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No Down Payment Home Loans Not a Dream

Yes, there are a few no down payment home loans out there. Discover the coolest no money down home loans on this page. These are some of the best of the first time home buyer loans!

Have you heard some speak of no money down home loans? Is this true or is it just a dream? Actually, it is true, there are such products out there. They are a little harder to qualify for. In this article I will explain some of the most common ones.

Like this couple dreaming, there really are such loan programs out there!

couple dreaming of no down payment home loans

No Money Down Home Loans

Here is a list of some of those type of loans:

USDA loans (US Department of Agriculture, formerly Section 502 loans)
VA Loans
Those loans called 80/20 Loans
VA Vendee Loan

Let me explain each of these programs and how they are no down payment home loans.

USDA Rural Loan

This is an awesome loan product and has no down payment requirements. It is a US Department of Agriculture Loan (USDA). Unfortunately you can only use this loan for home that are considered to be in a rural area. Which means they are usually good in outer areas of the suburbs. Thus you cannot use this type of loan to buy property in the city.

VA Loans

Most all VA Loans do not require a down payment and are an excellent option. But you must be a veteran in order to qualify for one of these loans. Thus it is not a loan for everyone.

80/20 Home Loans

What some lenders will do is offer a 80/20 loan as a no down payment home loans program. That means you get two loans. One for 80 percent of the purchase price and the other for 20 percent of the purchase price. Why would this work?

The 20% loan is usually at a higher interest rate, so the lender makes more on it and is willing to allow for this. An advantage is you may be able to avoid private mortgage insurance, whereas the 100 percent financed home loans usually may require private mortgage insurance.

VA Vendee Loans

This is a very interesting loan product. Anyone can apply for this loan product and you do not have to be a veteran to qualify. But you can only use it to purchase VA REO properties. So if it is a VA foreclosed home you are considering and you meet the requirements for a VA Vendee Loan, you have a no down payment home loan! They will even increase the loan amount by 2 percent to pay for closing costs and many other expenses.

Disadvantages of the No Down Payment Home Loans:

Your monthly payment will be higher. Consider, the more you owe, the higher the payment.
They are a little harder to find a lender who will offer this kind of loan product.
They have some different and even unique requirements to meet.
Many will require private mortgage insurance.

Each persons individual circumstances will vary. This type of product may be perfect for you. Perhaps you are looking in the suburbs or rural area and can qualify for USDA Loan. Or you are a veteran and can qualify for a VA Loan. Either way it will be worth it for you to investigate if no down payment home loans will fit your needs.

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