How do I buy a house with $0 down? | Monday Minute November 2, 2020

First - loan types. There are a couple loan types that you can get in with 0% down. The first one is the VA loan. Now this loan is specific to veterans and active-duty military. There are a few other caveats but I'm going to leave those out for now. The next is the USDA loan. This loan is 100% financed loan but it's very specific on where the property is located. Generally, this is found in rural properties, outside of the city limits. In the area of Frederick, where we are, that actually happens to be quite a large area so if you can qualify for USDA there are a lot of opportunities for 100% financing.Next - grants and state programs. With the grants and state programs there are a couple different options. One is the down payment assistance and then the other are flex loans which basically builds in your down payment assistance and closing help into the entire loan amount and the way that these are broken down is either a grant or a loan. Grants are essentially gifts from the government that never have to be repaid, assuming certain qualifications.Option two are loans. With a loan there are a couple different kinds. There is your traditional, which means you're going to, in addition to your mortgage, be paying back that down payment assistance over the course of that mortgage. There is a deferred loan, which means that this isn't going to be paid back until you sell move, or you refinance. Lastly, there's a forgiveness program. These depend on a period of time, normally five or up to 15 or 20 years. If you were to live in the home for that period of time that down payment assistance would be forgiven, you never have to pay that back. Now with these grants and down payment assistance programs there are a couple of qualifications that one must meet to be able to accomplish. Oftentimes it's going to be a first-time home buyer loan, or it's going to be a low to moderate income, or based on location decided by the census targeted tracks.Lastly – gifts. That means mom and dad, grandparents, a friend could give you a gift for that down payment. When you think about FHA with a 3.5% down or a conventional as low as 3% down, that's not as much money as one might think. If you know somebody that's willing to give you a gift, this is another way that you can avoid that down payment.