ARE THERE ANY ZERO DOWN LOANS STILL AVAILABLE?

A major stumbling block for Mississippians when trying to acquire a safe, decent, and affordable home is finding cash for down payment and closing costs.  Down payments typically range from 3.5 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 by the prospective purchaser.

Much has been made that there are no longer any zero down payment loans still offered.  However, in the state of Mississippi, where Loretta Davey Martello is a licensed real estate agent, there are still a few types of loans that do not require a down payment or the down payment is added into the loan amount, IF the buyer qualifies:

FIRST-TIME HOMEBUYERS

The first type of loan in this category is sometimes referred to as "the first-time homebuyers" loan which can be utilized if the applicant has never owned a home or it has been at least 3 years since they have been on the title of a property.  There are other qualifications, such as income and credit scoring minimums, that must be met, also.  There have been recent changes in this program but if qualified, the purchaser can receive 3 percent of the required 3.5 percent down payment in the form of a 2nd small loan for the term of 10 years, with the remaining .5 percent being supplied by the Buyer. There is also a similar loan product supplied 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 no down payment with this type of loan, and the buyer can typically borrow up to 102 percent of the sales price.   This extra 2 percent can be used 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 percent (of the loan amount) funding fee that, in most cases, will 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 purchaser will qualify for any of these loan programs, it is still important to know they are available so that the purchaser may fully understand all of his or her mortgage loan options.