ARE THERE ANY ZERO DOWN LOANS STILL AVAILABLE?

A major stumbling block for Mississippians today when trying to acquire a safe, decent, and affordable home is finding cash for downpayment and closing costs.  Down payments typically range from 3 to 20 percent of the sales price for the property, depending on the type of loan a buyer is qualified for.  The mortgage officer will be the one to determine this, based on information supplied to him or her.

Much has been made that there are no longer any zero downpayment loans still offered.  However, in the state of Mississippi, where Loretta Davey Martello is a licensed real estate agent, there are at least 4 types of loans that do not require a downpayment, IF the buyer qualifies:

FIRST-TIME HOMEBUYERS

This first type of zero downpayment loan is typically referred to as "the first-time homebuyers" loan.  This can be in the form of a 3% downpayment given by the state of Mississippi, with the remaining .5% being supplied by the Buyer, OR it can be through the Down Payment Assistance portion of the Mississippi Home Corporation.  Both have specific qualification requirements.  To find out more about those qualifications and Mississippi Home Corporation in general, go to www.mshomecorp.com.

USDA RURAL DEVELOPMENT LOAN

In order to be eligible for many USDA loans, household income must meet certain guidelines. Also, the home to be purchased must be located in an eligible rural area as defined by USDA.  There is not only no downpayment with this type of loan, but the buyer can typically borrow up to 102% of the sales price.   This extra 2% can be used to go toward closing costs, necessary items for the home, etc. There is also no PMI/MIP (Private Mortgage Insurance or Mortgage Insurance Premium) with this type of loan.  However, there is at least a 2% (of the loan amount) funding fee that, in most cases, be added on top of the purchase price.  For more information on this great loan program, please use this link: http://eligibility.sc.egov.usda.gov.

VETERANS AFFAIRS LOAN

A traditional VA loan is  guaranteed by the U.S. Department of Veterans Affairs. Service persons and veterans can qualify for a VA Loan, which usually offers a competitive fixed interest rate, no down payment and limited closing costs. While the VA does not issue the loans, it does issue a certificate of eligibility required to apply for a VA loan.  Most mortgage companies and bank mortgage departments offer this type of loan.

VETERANS' HOME PURCHASE BOARD

Through this entity, our state strives to provide a benefit to Mississippi residents who are veterans, current active duty military personnel, or current members of the Mississippi national guard or reserves with over six years of service. The Veterans' Home Purchase Board offers mortgage loan funds for the purchase of an existing home or a home recently constructed. The benefit is the advantageous interest rate. To learn more about this program, including qualifications and interest rate, please visit www.vhpb.state.ms.

While not every buyer will qualify for any of these 4 loan programs, it is still important to know they are available so that a buyer may fully understand all of his or her mortgage loan options.