Grant programs and 0% down loan programs?  We ask our lender what you want to know.

As interest rates continue to decline, many people are thinking about buying a house. Maybe you're tired of renting and ready to call something your own. Maybe your current home just doesn't work for you anymore. Either way, there are a lot of $0 down or low $ down loan programs available, as well as grant programs that can help with down payment. We recently sat down with one of our preferred lenders, Russell Nash with George Mason Mortgage, to learn more about programs that are available to help people become a home owner with little to no money down. Click here to watch our video, or check out frequently asked questions answered by Russell below. Let’s start by talking about 0% down loan programs. Can you give me a breakdown of the 4 most popular 0% down loan programs, how they work, and who they are best suited for? USDA (available in Dispatch Station)- The USDA loan is available in rural areas. It typically has a low interest rate(depending on credit qualifications) with lower monthly mortgage insurance. VA- Available for all veterans with 100% financing. There is a VA funding fee required but has no monthly mortgage insurance. This loan program, like USDA loans, is available for 1st time homebuyers or on subsequent purchases. FHA+- This loan program has a 1st & 2nd mortgage that covers 100% of the purchase price. The 1st mortgage allows for a loan of 96.5% of the sales price while the 2nd loan allows for up to 3.5% of the sales price. Conventional +- This loan program is like the FHA plus loan where it has a 1st & 2nd mortgage to cover 100% of the sales price. The difference is the 1st mortgage allows for a loan amount up to 97% of the sales price and the 2nd loan allows for up to 3% of the sales price. What do you need to qualify for these loans from a credit, income, and debt standpoint? Typically the minimum credit score for the VA, FHA Plus & conventional loan programs is 620. The maximum debt to income ratios for these programs is 45%. This means for every $1000 of monthly income the maximum monthly debt cannot exceed $450. The maximum income for a 2 person or less household is $98,400 and the maximum for a 3 person household or greater is $114,900. The USDA loan program follows all the above requirements other than the minimum credit score. The minimum credit score requirement is 640 for all USDA loans Are there other grants that are available for first time homebuyers? Yes. We have the VHDA first time homebuyer grants where a borrower can get anywhere from 2-2.5% of the sales price in grant money. This is for all VHDA loan programs (VA, USDA, FHA & Conventional). There is also the H.O.M.E. grant available to first time homebuyers. These are done directly through HOME and the county website where you are looking at purchasing. What are the requirements for these loans, and how much can they help a borrower? The requirements are the same for the grant programs as the above guidelines with the exception of income requirements. The maximum income for a 2 person or less household is $78,700 and a 3 person or greater household the limit is $91,900. What if you aren’t a first time homebuyer? What options are out there for little to no money down on a mortgage? The USDA & VA loans are still available if you are not a 1st time homebuyer at the 100% financing level. The conventional loans require a minimum of 3% down and the FHA requires a minimum of 3.5% down payment if you are not a 1st time homebuyer. What advice would you offer someone who is looking to purchase a home? o Number 1 is to contact a lender to get pre-qualified. To verify that your credit scores are within the requirements to become qualified. With historic lows for interest rates, now is a fantastic time to become a homeowner as you can pre-qualify for more today than you could have qualified 6 months to a year ago. For more information on $0 or low money down loan programs, or to find out more about Shurm Homes, contact Jennifer at 804-929-4297, or

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