Discover how to Buy a Home with a Zero Down Mortgage
Many people today are under the false assumption that they need tens of thousands of dollars for a down payment to buy a home due to the sub prime fall out. Nothing could be further from the truth. A little known HUD approved and RESPA compliant program allows any buyer to purchase a home up to a $729,000 purchase price (in some areas) for absolutely NO MONEY out of pocket.
The following is a process to step you through the bascis of buying with absolutely no money out of pocket. This government program is approved by HUD and completely RESPA compliant.
You must first find an expert Mortgage Consultant that’s familiar with FHA and working with a DPA. DPA is short for down payment assistance program. The most popular DPA is the Nehemiah program. Nehemiah has been in existence since 1998 and has assisted buyers with gift funds of over $1 Billion (yes a “B”). They are completely government approved.
Now you will need to get pre-qualifed for a DPA with a certified DPA specialist. Most people are concerned about credit with a no money down program but credit does not need to be perfect. Credit scores can be as low as 550 to qualify. FHA is primarily concerned with the borrowers ability to repay. So they will be focused on the income verification and will look at your last 2 years of income verification. Any owner occupant is eligible for this program.
Begin your home search. FHA limits have been raised to as much as $729,000 in some areas such as Los Angeles county. However, most areas go up as high as $423,000. For many areas $423,000 buys much more than a starter home in todays market which makes home shopping a snap.
Negotiate with your seller to participate in the DPA. The ZERO down home loan program requires the sellers participation to fund the closing costs and down payment. Fortunately, in this market environment sellers are more flexible than ever. The seller will be primarily concerned with his/her net from the sale. So many times your offer will be closer to the list price since you will be requesting a 7-10% contribution for down payment and closing costs.
Make application for a mortgage with a DPA specialist. Make sure that you choose someone that has experience working with the FHA and especially a DPA. This is not the time to risk working with an inexperienced “loan officer”. You will lose valuable time and perhaps the deal as well.
You will be required to bring 2 years W-2′s and/or tax returns as well as your most recent paystubs. Even though no money down is required you will also need your most recent bank statements. If currently renting, copies of your last 12 cancelled checks or a letter from the management company will be needed.
Now it’s time to celebrate! The closing is the simpliest part – if your realtor and mortgage planner have done their jobs. There should never be any surprises and all your questions should have already been answered. It is amazing to see clients walk away from closing with a 5.8% Fixed rate mortgage and a new home – all with no money down! Anyone can do it, even you. Don’t miss out on the greatest buyers market of our generation.
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