Low down payment loans: what are my options?

Homes & real estate
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Low down payment loans: what are my options?

Homes & real estate

When buying your first home, the last thing you want to do is drain every penny you’ve saved just for the down payment. But for many people, is there another option?

The good news is: yes. A number of different mortgage programs are designed to help first-time buyers get into their first home by offering much lower down payment options than the 20% typically required with a conventional loan. Depending on how much you have saved, the location you are buying in, and even your career, you may be able to find a loan with a down payment under 5%.

VA Loans

If you are in the military, a veteran, or the family of either of these, you may qualify for a VA loan. These offer $0 down payments and allow for 100% refinancing of your home’s value.

Loans For Those With Financial Hardship

Mistakes happen, but for those who have had financial mishaps, the ability to purchase a home in the future may seem lost. As long as your situation was not a result of financial mismanagement, the FreshStart program can help you qualify for a home loan. Even if you had a short sale, you might be able to qualify as soon as 12 months after.


Securing your loan with a substantial down payment doesn’t allow you to leverage that money to reduce your home loan debt over the long run. An EquityBuilder loan, on the other hand, foregoes large down payments and mortgage insurance to allow you to increase the equity in your home at a much faster rate. Your loan term ends up shorter, and your interest rate ends up lower.

FHA Loans

FHA loans remain one of the easiest ways for new homeowners to purchase their first home as they have down payments as low as 3.5%. In 2016, over 1.2 million FHA loans were generated, with nearly 880,000 of these used for a purchase. It's easy to see why these are so popular: for 20% of a conventional loan of $250,000, you would need to pay $50,000 upfront, while with the 3.5% of an FHA loan, you’d be responsible for $8,750.

Rural Development Loan

Specific areas designated as "rural" encourage people to move there with attractive loan terms and offers. In fact, if you meet all the qualifications, you may be able to finance 100% of the property. Credit guidelines are a bit more flexible with rural loans, and these are often designed to get low and middle-income individuals into their own homes.


If you’re looking for a straight-forward transaction, but you need your funds available faster than usual, a SimpleLoan is guaranteed to have your loan ready to close in 15 business days or less—or you will receive a $300 rebate. To qualify, you’ll need a credit score of at least 680, income verification, no past-due payments in the past 12 months, and a debt-to-income ratio no more than 41%.

Homeownership Opportunities Program (HOP)

Could you use a little extra help getting your down payment and closing costs together? The HOP program* helps those who have not owned a home in the last three years—including new buyers—with the ability to buy a house with as little as $1,000 and the added opportunity to receive assistance up to $8,000 for closing costs and down payments. Qualifying requirements for HOP include your credit, income levels, and homeownership counseling. Always check with your loan advisor to see what programs you qualify for. 

Doctor’s Loans

Practicing doctors, including those in residencies, can access a loan amount of up to $1 million and may be able to qualify for no down payment and no mortgage insurance requirements. These loans are only available to medical doctors, osteopaths, dental surgeons, dentists, optometrists, ophthalmologists, podiatrists, surgeons, and psychiatrists.

Professional Loans

If you are an attorney or other professional, you can qualify for a professional loan, which comes with a down payment as low as 3% and also does not require mortgage insurance.