Buying a Home: Great No to Low Down Payment Options

Buying a Home: Great No to Low Down Payment Options



Owning a home is a major element of the American Dream, and many people find that purchasing a home is the wisest financial decision they ever make. However, the belief they need a sizable down payment keeps many potential homeowners out of the market. They end up spending thousands of dollars each year on rent instead of building financial independence with home ownership.

You May Qualify for No to Very Low Down Payments

Recognizing the importance of home ownership, the federal and state governments have enacted several loan programs that require no or exceptionally low down payments. It is well worth your time to explore these programs, even if you have the cash to make a larger down payment. Using any of the programs will often allow you to purchase a home, and perhaps one larger than you might otherwise consider.

We carefully monitor the best programs to get you into the home of your dreams with the least upfront expenses and lowest down payment. I discuss several of our favorites below, and we can help you determine which ones meet your needs and qualifications.

Conventional 1% Down Program

Our current favorite actually allows us to assist you in buying your home. The program we use actually requires 3% down, but we gift you 2%. That means with just 1% down you can get into a home that starts you off with 3% equity. Additionally, your monthly payments average as much as $200 a month lower than other options, such as the FHA Grant and Utah Housing Programs that we discuss below. With these advantages you can see why we are currently completing a number of these loans each month.

FHA Loan with Down Payment Assistance.

The state of Utah and its counties put great emphasis on the concept of home ownership. As a result, there are multiple grants available to help you purchase a home. There are often income restrictions and other qualifying factors, but the help is significant for those who qualify. For example, our favorite, the CDC Grant ( provides many residents of Salt Lake County an outright grant of as much as $5,000. We can help you explore this option and other grant programs if you live outside Salt Lake County.

FHA Loan with Utah Housing Second

Another popular and useful program has been established by Utah Housing to work with FHA loans ( The state agency enhances a regular FHA Loan with 3.5 percent down loan with a 6% second note. This amount covers the required FHA down and part of the closing costs on the loan. We find this is an excellent option for homes with a purchase price below $200,000 and borrowers with some credit rating challenges. While the rate on the mortgage may be a bit higher, this program usually generates multiple offers and is a great solution for certain situations.


If you live in or are looking to live in qualifying rural areas, the USDA loan is a 100% financing option that many buyers fail to consider. Fortunately, we are able to help many clients who live in such qualifying areas as Tooele County, Saratoga Springs, Eagle Mountain, and the Southern part of Utah County. On top of 100% financing, USDA Mortgage Insurance is significantly lower than the required FHA Mortgage Insurance. Our team will help you evaluate this as a preferred source of home financing.

VA Loans

Of course, active duty and veteran military personnel are rewarded for their service to our country with a great 100% financing, program. Additionally, VA loans are generally more flexible on minimal credit scores and you avoid the cost of mortgage insurance. If you have served in the U.S. Armed Forces, let us explain this important benefit in more detail. You may find this an ideal route to home ownership.

FHA Loans

As we mentioned above, a traditional FHA loan requires only 3.5% down. While there are certain restrictions and qualifications, this is a great way to get that starter home and begin the process of building equity in your own home, with the option to later use that equity for refinancing or purchasing a larger house.

Conventional Loan Programs

Contrary to what many people believe, 20% is not a requirement for many great conventional loan options. We constantly monitor the markets for the best options, and we can show you a variety of ways to purchase your house with as little as 3 to 5% down.

Are you sitting on the sidelines because you think you can’t come up with a large enough down payment? Call today and we will show you how you can get into the home ownership game with a zero or very low down payment!


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