Wednesday, January 15, 2014

No Down Payment

Yes, dear Home Buyers, there are still some loans available that allow for ZERO down payment.

These no-money-down deals apply either to eligible buyers, or to eligible properties. Let's look at a few of the most popular conventional no-money-down mortgage programs.

Veterans Affairs (VA) Loans are available to military buyers, and require no down payment. 90% of all VA loans are issued without a down payment.You may be eligible for a VA loan if:

  • You served 181 days on active duty during peacetime;
  • You served 90 days on active duty during wartime;
  • You served six years in the Reserves or National Guard, or
  • Your spouse died in the line of duty or from a service-connected disability.
Qualified borrowers still have to meet VA and lender requirements, including credit, income, property value, and debt-to-income ratios.VA loans can be used to purchase or refinance a property. Private Money Insurance is not required on a VA loan, making payments more affordable for many borrowers.

There are no pre-payment penalties on a VA loan, which means that it can be paid off early without financial penalty. And VA loans are also assumable - by qualifying non-veterans as well as veterans.

Another popular no-money-down loan is offered through the US Department of Agriculture (USDA). Like VA loans, USDA loans are backed by the US government, but offered through specific mortgage lenders.

USDA loans are offered on properties located in designated rural areas, so they will not work for someone wanting to purchase an urban property in the city of Seattle, for example. The USDA provides maps of the areas in which it will consider making these loans.

USDA Home Loans offer 100% financing to qualified buyers, and allow for all closing costs to be either paid for by the seller or financed into the loan. USDA offers some the lowest rates of any loan, and always have a fixed interest rate.

In order to qualify, borrowers must also have a good credit history that shows their ability to make payments and meet their financial obligations. The program also has income limitations for the borrower to be eligible.

Here is a list of the most common USDA loan areas in King County:
  • Maltby/Woodinville- This area usually has a Woodinville address. It’s in the northeast area of Woodinville in the general area of Highway 522 as it heads towards Monroe.  If you’re at the Wellington Hills Golf Course or Northeast of there, you’re probably in a USDA eligible area.
  • Duvall- A popular/rural area near the Microsoft campus, similar to Maltby.  Virtually the entire city is in a rural area.
  • Carnation- A little further from the Microsoft campus but still close enough, this city is also rural.
  • Fall City- This is the closest city to Issaquah.  A nice alternative to buyers who want to near Issaquah but need a zero down loan.
  • Snoqualmie- This is one of the most popular cities for USDA loan in King County. The area is growing and is near tourist attractions, such as the Snoqualmie Casino, Salish Lodge and Snoqualmie Falls waterfall.  Be mindful that the USDA has restrictions on areas in flood zones, so you’ll probably have to buy on the plateau.
  • Northbend- This is a small town near Snoqualmie and at the county limits.  It’s a small town you pass before going over the mountains and  is known for their outlet mall.
  • Maple Valley- This is definitely one of the most popular USDA cities in King County if not the most.  The city is actually split with only half of it in the eligible USDA area.  On the north side of Maple Valley above where Highway 18 meets Highway 169, any area that is east of Highway 18 is eligible.  The middle and southside of Maple Valley is eligible if you’re east of Highway 169, which is the majority of the city.  Many new builders have been building on the eastside of 169 since USDA loans are attractive to buyers.  They may not be able to keep their eligibility status when the census is done.
  • Black Diamond- A small, nice community just south of Maple Valley.  Only the northwest section of Black Diamond isn’t eligible.  The majority of the city sits in an eligible area.
  • Auburn- A very small section of east Auburn is eligible, just near Black Diamond and Enumclaw
  • Enumclaw- Like Maple Valley, Enumclaw is one of the most popular cities for USDA financing.  The entire city sits in a USDA area
  • Vashon Island- A small Island that is in the southwest area of King County, the entire island is eligible.  Many homeowners will live on Vashon and take a ferry to Tacoma or Seattle.
  • Maury Island- A small island near Vashon Island, the entire island is also eligible for USDA financing.

I work with lenders who are qualified to offer these and other types of loan products that make home-buying more affordable. That way, I can offer more service to my VIP Buyer Clients by saving them both time and money on the purchase of a home. To learn more, please message me privately at or leave a message on my 24-hour recorded real estate hotline at 888-621-4999.

Happy Investing!

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