Buy your First House no Money Down
Buying houses with no money down is a subject that has been used by investors that may be cash strapped or don’t want to use their own cash, but want to invest in real estate.
There are several techniques for buying properties with no money down, however initially this article is focused on first time home buyers. Other techniques may be presented later. Using the first time home buyer program recently created by Fannie Mae, will get you 97% of the way there. There is some flexibility where the final 3% comes from.
Fannie Mae has just rolled out a new program where they will accept mortgages with down payments of as low as 3 percent from first-time buyers.
First time buyers are well anyone who has not owned a home in the last three years or at least one co-borrower meets these requirements, you may want to read this again. This program is also extended to refinancing Fannie Mae loans for 97% LTV.
This program is designed to help the millennial generation and low to moderate-income consumers to become homeowners.
But 3% is isn’t no money down, right? This is true, however right out of the pages of Freddie Mac’s FAQ web page comes the question. Can I use gift funds as my down payment? The answer is yes. The 3% down payment can come from a number of sources, including personal funds, gift funds, grants and affordable second mortgages.
One source of gift funds could be from a parent or relative. Another source could be in the form of a either unsecured or secured as a second mortgage on the property itself. Another source you can explore is to borrow money from your 401k fund from work, if you take this route make sure you understand the consequences if you leave your current job.