Do I need 20% down payment?

I saw it again on the news this morning. Some talking head "Real Estate Expert" was telling the national audience that lenders require 20% down payment.

Generally speaking, this couldn't be further from the truth, and needing 20% down is a huge misconception in the marketplace today. For the average home buyer, there are numerous options for obtaining financing with less than 20% down.

DON"T ASSUME! Contact a local licensed mortgage loan officer and let them professionally review your individual situation. Click here to learn how to shop for a lender.

NO DOWN PAYMENT OPTIONS:

VA Financing - Here is a big thank you from the government. As a Vet, you are eligible for zero down payment, 100% financing on a home purchase. You either need to be an active or honorably discharged member of the armed forces or national guard. The seller can pay your closing costs and there is no mortgage insurance, saving you a lot of money monthly on your home. Click here for more information on VA home loans.

USDA/Rural Development - The Guaranteed USDA program offers zero down payment 100% financing for qualified borrowers purchasing a home in a rural area. There are many locations just outside of major metropolitan areas that are eligible for this program. The program has household income restrictions for their program, so Click here to see if the area you're looking is USDA Rural Development eligible and if you income qualify.

LOW DOWN PAYMENT OPTIONS:

FHA Financing - FHA offers home loans with as little as 3.5% down. FHA has no income limits for the household, but does have loan limits, based on the <span style="text-decoration: underline;">county</span> in which you are purchasing the home. Click here to check on the limits for your area. FHA is one of the more lenient programs in regards to qualifying, and the down payment can be received as a gift from an eligible source (parents, state or local program, etc).

Local and State Bond Money Programs - Many states and even some larges cities have down payment assistance programs that can be used in conjunction primarily with an FHA loan. These programs vary widely, but if available in your area, are a great tool for those who qualify. Contact a local lender to inquire what programs may be available in the area you want to buy a home.

Conventional Financing - Fannie Mae and Freddie Mac both still offer programs with as little as 3% down. For example, FannieMae offers HomePath financing on eligible FannieMae foreclosures. For those with acceptable credit, many conventional loans are available with just 5% down.

<span style="text-decoration: underline;">WHO NEEDS 20% DOWN?</span>

• Investment properties typically require at least 20% down
• JUMBO loans, which are loans generally over $417,000, generally require at least 20% down