Homeownership serves as a big part of the American dream, encouraging young and old alike to save their pennies and buy themselves a chunk of homeland soil. The down payment   one of the primary barriers to homeownership   prevents many consumers from fulfilling this dream. Can you buy a house with no money down? You can with one of these solutions.

USDA Loans

The U.S. Department of Agriculture (USDA) offers 90 percent loan backing through USDA loans. You can get a no-down-payment mortgage if you buy or build a house in a qualifying rural area. You don't have to plant corn or raise chickens to qualify, and some areas are less rural than others.

The USDA imposes income limits on consumers who are buying a house with no down payment. If you qualify, the USDA guarantees 90 percent of the loan to the lender if the borrower defaults. It's possible to both buy and refinance homes through the USDA's program.

VA Home Loans
If you or your spouse served in the armed forces, the U.S. Department of Veterans Affairs (VA) offers an attractive mortgage backing option through VA loans. This zero-down mortgage option allows you to buy a home without any upfront capital. You don't have to pay private mortgage insurance, either; however, borrowers have to pay funding fees.

The VA doesn't issue the loan. Instead, homebuyers get funding through a traditional lender. The VA simply backs the loan for borrowers who want to buy a house with no money down. If the borrower defaults, the VA assumes responsibility for the balance on the loan.

Housing Finance Agencies
A low-income borrower might benefit from a no-money-down mortgage through a housing finance agency. Local and state organizations and authorities that want to encourage consumers to buy houses run most of these agencies. Some of these agencies finance a junior loan that runs concurrently with the mortgage loan and spreads out the down payment into installments.

If you want to buy a house with no down payment, research housing finance agencies to determine if any of them operate in your area. Most have stringent qualifications in terms of income, debt-to-income ratios, credit scores and the use of other aid programs.

Gifts From Third Parties
FHA (Federal Housing Administration) loans require you to provide a down payment. However, the FHA permits you to make your down payments with gifts from family members, the government or nonprofit agencies. If you can secure such a gift, use it to cover your down payment without any out-of-pocket expenses.

If you intend to use an FHA or conventional loan through any of these programs or solutions, consider using a mortgage review service. Even with no down payment, you'll still need to evaluate different loan options to get the best terms.

Buying a house is a big step for any consumer. It also provides you with security and pride, even if you don't have a down payment for the purchase. Using one of the above options will help you buy a house without an initial outlay of money.

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