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How to Compare No and Low Down Payment Mortgage Programs
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Best Low Down Payment Mortgage Programs
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How to Compare No and Low Down Payment Mortgage Programs

Harry Jensen, Trusted Mortgage Expert with 45+ Years of Experience
, Trusted Mortgage Expert with 45+ Years of Experience

There are many no and low down payment mortgage programs available to borrowers and we have outlined numerous programs in the char below.  Options include programs that are backed by the government such as the FHA, VA, USDA and HUD Section 184 programs and conventional programs such as HomeReady, Home Possible and HomeOne.  Plus, some larger banks offer their own programs.  With so many options to choose from, how do borrowers compare no and low down payment programs?

While all of these loan programs have the same goal of helping you buy a home with little or no down payment, they also have unique features that make them different. These differences are designed to make the programs more appealing or applicable to different borrower segments. For example, some programs may only be available to first-time home buyers while other programs are also available to repeat home buyers. Some programs are focused on borrowers with lower incomes while others are accessible to people of all income levels. And some programs are better suited for borrowers with no or non-traditional credit profiles while others require higher credit scores.

These are just several examples that demonstrate the potential differences in no and low down payment mortgage programs. Borrower should focus on the following factors to determine the program that is right for them:

Use the FREEandCLEAR Lender Directory to find lenders that offer wide range of low down payment mortgage programs.

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With so much information to sort through, the chart below compares the key qualification requirements for no and low down payment mortgage programs.  The chart provides a summary of each program and compares important loan features including borrower eligibility, credit score, debt-to-income ratio, mortgage rate and extra fees.  The chart also shows you if the program applies loan limits and borrower income limits and lets you know if you are required to pay mortgage insurance.  Comparing low and no down payment programs enables you to understand their positives and negatives and select the mortgage that is right for you.  We also recommend that you click on the program title to review extensive information about each program.

Program
Summary
Borrower Eligibility
Property Eligibility
Interest Rate
Extra Borrower Costs
Mortgage Limit
Borrower Income Limit
Program Availibility
  • 1% down payment
  • Usually combined with down payment assistance program
  • Owner-occupied, single-unit, principal residence
  • Higher rate than government-backed programs
  • Depends on program and property location
  • 3% down payment
  • No personal borrower contribution
  • One borrower must be first-time homebuyer
  • Credit Score: ~680
  • Debt-to-income ratio: 45% - 50%
  • Owner-occupied, single-unit, principal residence
  • Higher rate than government-backed programs
  • Private Mortgage Insurance (PMI)
  • Conforming loan limit
  • None
  • 3% down payment
  • No personal borrower contribution
  • Factors-in income from parents, resident relatives and boarders
  • Credit Score: ~620
  • Non-traditional credit profiles
  • Debt-to-income ratio: 43% - 45%, up to 50% in certain cases
  • Complete mortgage counseling class
  • Owner-occupied     1-4 units, principal residence
  • Higher rate than government-backed programs
  • Private Mortgage Insurance (PMI)
  • Conforming loan limit
  • 80% of area median income (AMI)
  • 3% down payment
  • No personal borrower contribution
  • Include boarder / rental income
  • Credit score: ~660
  • Permits non-traditional credit profiles with strict review process
  • Debt-to-income ratio: 43% - 45% (lender discretion)
  • Complete mortgage counseling class (first-time buyers)
  • Owner-occupied     1-4 units, principal residence
  • Lower rate for low income borrowers or if property is located in designated area
  • Private Mortgage Insurance (PMI)
  • Conforming loan limit
  • 80% of area median income (AMI)
  • 3% down payment
  • No borrower personal financial contribution required
  • Credit Score: ~660
  • Debt-to-income ratio: 43% - 45%
  • Homeowner education class required for first-time buyers
  • Owner-occupied, single-unit, primary residence
  • Higher rate than government-backed programs
  • Private Mortgage Insurance (PMI)
  • Conforming loan limit (super conforming loan limit not allowed)
  • None
  • Credit Score: ~660
  • Debt-to-income ratio: 43%
  • Complete mortgage counseling class (first-time buyers)
  • Owner-occupied, single-unit, principal residence
  • Higher rate than government-backed programs
  • No private mortgage insurance (PMI)
  • Conforming loan limit
  • 3% down payment
  • No personal borrower contribution
  • Credit Score: 620
  • Debt-to-income ratio: 45%
  • Owner-occupied     1-4 units, principal residence
  • Higher rate than government-backed programs
  • Private Mortgage Insurance (PMI) -- lower than standard
  • Conforming loan limit
  • Cannot exceed area median income (AMI)
  • 3% down payment (single unit property)
  • 1% personal borrower contribution (single family home)
  • No private mortgage insurance (PMI)
  • Credit Score: 640
  • Debt-to-income ratio: 43% - 45%
  • Requires mortgage counseling class
  • Owner-occupied, single or two-unit, principal residence
  • Market interest rate but higher rate than government-backed programs
  • No private mortgage insurance (PMI)
  • Conforming loan limit
  • 80% of area median income (AMI)
  • 3% down payment
  • No personal borrower contribution
  • Considers income from non-borrower household members (relatives, boarders)
  • Owner-occupied, single-unit, principal residence
  • Higher rate than government-backed programs
  • Private Mortgage Insurance (PMI)
  • Conforming loan limit
  • None
  • 3% down payment
  • No personal borrower contribution
  • Flexible borrower qualification guidelines
  • Considers income from non-borrower household members
  • Credit Score: 660
  • Debt-to-income ratio: 43% - 45%
  • Owner-occupied     1-4 units, principal residence
  • Lower rate for low income borrowers or if property is located in designated area
  • Private Mortgage Insurance (PMI)
  • Conforming loan limit
  • Depends on property location
  • 3.5% down payment
  • No personal borrower contribution
  • Credit Score: ~580 (3.5% down payment)
  • Credit Score (10% down payment): ~500
  • Lenders may also consider borrowers with no or non-traditional credit profiles
  • Debt-to-income ratio: 43%+ (over 50% in certain cases)
  • Owner-occupied     1-4 units, principal residence
  • Lower rate than other mortgage programs
  • Up-front and ongoing FHA Mortgage Insurance Premium (MIP)
  • None
  • No down payment
  • Eligible active and retired military personnel
  • Credit Score: No minimum score required per program guidelines but most lenders  require a score of 620 
  • Minimum residual income after housing expense and debt
  • Debt-to-income ratio:~ 41%
  • Owner-occupied, single-unit, principal residence
  • Lower rate than other mortgage programs
  • Up-front VA funding fee
  • No loan limits for applicants with their full entitlement
  • None
  • No down payment
  • Property must be located in a USDA designated rural area or community
  • Credit Score: ~640
  • Debt-to-income ratio: 41%
  • Owner-occupied, single-unit, principal residence
  • Located in USDA designated rural area
  • Lower rate than other mortgage programs
  • Up-front and ongoing USDA mortgage insurance premium (Guarantee Fees)
  • USDA CALC
  • None
  • Depends on property location
  • Typically 115% of area median income (AMI)
  • No Down Payment
  • Property must be located in a USDA designated rural area or community
  • Mortgage payment assistance
  • 33 or 38 year mortgage terms lower monthly payment
  • Credit Score: ~640 (lower in some cases)
  • Debt-to-income ratio: 41%
  • Owner-occupied, single-unit, principal residence
  • Located in USDA designated rural area
  • Cannot exceed 1,800 square feet
  • Low as 1.0% with mortgage payment assistance
  • None
  • USDA / Conforming loan limit
  • Typically 50% -80% of area median income (AMI)
  • Enables eligible Native Americans to buy a home with a 2.25% down payment (loan amounts above $50,000)
  • Flexible borrower qualification requirements
  • No minimum credit score (case-by-case borrower approval)
  • Debt-to-income ratio: 41%
  • Owner-occupied     1-4 units, principal residence
  • Lower rate than other mortgage programs
  • Low credit score does not impact rate
  • Upfront and ongoing Section 184 Program mortgage insurance fees
  • Loan limits vary by county and number of units in property
  • None
  • No down payment
  • No closing costs private mortgage insurance (PMI)
  • Lower total monthly housing expense
  • No minimum credit score (character-based borrower evaluation)
  • Complete mortgage counseling class
  • Volunteer at five housing advocacy events per year
  • Owner-occupied, single-unit, principal residence
  • Located in approved area
  • Lower rate than other mortgage programs
  • No closing costs
  • No private mortgage insurance (PMI) or FHA mortgage insurance premium (MIP)
  • Limits on property value (typically less than $425,000)
  • None
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Current Mortgage Rates in Ashburn, Virginia as of November 26, 2020
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  • APR
  • Loan Type
  • Rate
  • Payment
  • Fees
  • Contact
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Data provided by Brown Bag Marketing, Inc. Payments do not include amounts for taxes and insurance premiums. Read through our lender table disclaimer for more on rates and product details.

Related FREEandCLEAR Resources


Sources

"Bridging the Down Payment Gap: Preparing for the first-time homebuyer opportunity."  Publication Number 855.  Freddie Mac, October 2016.  Web.

About the author
Harry Jensen, Mortgage Expert

Harry is the co-founder of FREEandCLEAR. He is a mortgage expert with over 45 years of industry experience. Over his career, Harry has closed thousands of loans for satisfied borrowers and now offers his advice and insights on FREEandCLEAR.  Harry is a licensed mortgage professional (NMLS #236752). More about Harry

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