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Can You Overcome The Down Payment Barrier?

Can you overcome the down payment barrier?

Housing prices keep going up, and along with prices the down payment goes up too.

You’ve been wanting to buy a home, prices keep going up every time you look. You wonder “How can you overcome the down payment barrier”? Don’t worry, you’re not alone. When you’re making an offer on a home there are lot’s of out of pocket expenses to consider, least of which is the down payment. The down payment can be a barrier to homeownership that seems too big to overcome. 

Don’t give up there are programs that just may help.

Bamboo Mortgage Services has been in Portland helping people buy homes. During that time we’ve discovered some programs that can help overcome the down payment barrier. A local resource is The Portland Housing Center. We are very familiar with The Portland Housing Center’s down payment assistance programs, and how they can help you. If you’d like to discuss how the programs work, we’ll be glad to see what options might be good fit for you.

VA Loans

There are loan programs that don’t require a down payment from the buyer. The VA loan is one option that offers 100% financing to active duty and retired Veterans. If you’ve served in the military and are unsure about the requirements to use this program it’s definitely worth looking into.

USDA Rural Development Loans

Another option for 100% financing that won’t require a down payment is the USDA Rural Development Loan. This type of loan is available to people interested in purchasing a home in less populated areas. If living in a little more rural area is appealing you to you should check out this eligibility map link. When you click the link simply accept the terms and enter an address to see if it’s in an eligible area.

FHA home purchase programs offer a lower down payment option.

The down payment requirement for FHA home loans is 3.5%. It’s not as great as a zero down option, but it can help you overcome the down payment barrier that Conventional Loans may propose. Most people have heard of an FHA mortgage but they mistakenly believe it’s just for low income, or are “bad credit home loans”. There are situations where the down payment required with FHA loans can be a gift, having a relative that can gift the funds might be a solution. There are down payment assistance or grant programs that can help you overcome the down payment barrier as well. And, last but not least the seller can pay closing costs up to 6%, these reasons are why FHA loans are one of the most popular type of home loan products. Just about 40% of loans in the U.S. are FHA. The fact that FHA loans have flexible qualifying guidelines and low down payments make them very popular for first-time buyers.

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