Loan options overview -> Low down payment loans

Low down payment loans

For a buyer who doesn’t have 20% down, there are many options.

Although a 20% down payment is common, many home buyers, especially ones buying for the first time, don’t have 20% down for the property they want.

Loan programs that minimize down payment:
  • Veteran’s Administration (VA) loans are available with no down payment, subject to certain restrictions. In several bay area counties, VA loans with no down may be available on homes with purchase prices up to almost $1 million, and with less than 10% down on homes up to $1.5 million.
  • FHA loans are available with as little as 3.5% down. In most bay area counties the maximum limit for an FHA loan is $625,500. If you are considering FHA, have your lender clearly explain the pros and cons and all of the costs and terms. FHA loans require a high upfront fee, as well as a high monthly mortgage insurance payment.

When putting down less than 20%, you will have to get a combination of a first mortgage and either a HELOC from a lender or a second mortgage from the seller, or you’ll be required to pay mortgage insurance.

Other popular loan programs available for low down payment:
  • Conforming loans of up to $417,000, can be obtained with as little as a 3% down payment, all of which can be gift funds
  • High-balance conforming loans over $417,000 and up to $625,500 (depending on the county), are available with as little as 5% down payment
  • Jumbo loans, depending upon the loan amount, lender, and the borrower’s qualifications, can be found with as little as 10% down. It may be possible to put down as little as 5% with a matching 5% gift from a family member.

An experienced mortgage broker with access to many different lenders may be your best source for finding the low down payment loan possibilities that work for you.