No Down Payment?

There is still one program up and running that allows for just that. (USDA) Single-Family Housing Guaranteed Loan Program, is one of only a few remaining residential finance options that do not require a down payment. However it is quickly running low on funding and could be depleted shortly.

Rep. Shelley Moore Capito (R-W.Va.) and Rep. Paul Kanjorski (D-Pa.) have filed separate bills that would generate new funding for the mortgage program. This will be accomplished by increasing the fee structure charged to buyers to keep the program alive.

The lawmakers hope to move the measures through committee and to the House floor quickly, since the busy spring selling season for real estate is already underway. While some experts see nothing-down financing initiatives as risky, the USDA reported a foreclosure rate of 1.72 percent last fiscal year compared to the FHA’s 3.32 percent. FHA requires at least a 3.5% down payment.

I feel the USDA program is critical for many low and middle income borrowers who purchase modest properties in the rural areas, as well as for first-time homebuyers. Keep in mind that by rural areas the home can still be in a sub-division in a qualifying area. Your Realtor should be knowledgeable of which homes qualify.