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4 Ways to Buy a Home with No Money Down

Matt Crawford & Tricia Kincaid Crawford
Feb 8 8 minutes read

1. Portfolio Loans

A portfolio loan is a loan that only a bank gives to a mortgage, that stays inside the portfolio of the bank. Since these loans stay with the bank, the bank is not able to sell the loan on Wall Street to another bank. The bank who keeps these portfolio loans is then able to have more freedom to work outside the normal guidelines of a standard mortgage loan.

Portfolio loans are great for home buyers who have unique situations when purchasing a home, such as the property type. Home buyers who are looking for a condominium are encouraged to seek out a portfolio loan, as well as properties that are currently under construction or property types that are unusual for the market. 

Home buyers who have a unique income should recommend seeking out a portfolio loan. Whether you are a private or independent contractor, or self employed, a portfolio loan will ease the stress of obtaining the home of your dreams.

Portfolio loans have the capability of helping with clients who have bad or ruined credit. Banks are more flexible when working with these buyers and are able to thanks to a portfolio loan.

Contact us to get a full list of banks that offer portfolio loans.


2. Grant Programs

The Indiana Housing and Community Development Authority (IHCDA) envisions a sustainable quality of life for all residents in the state of Indiana. The IHCDA provides opportunities for housing, advocates self sufficiency, and empowers communities.  The IHCDA has multiple programs for being able to afford your new home. Here are a few programs that are offered:

                    HELPING TO OWN (H2O)
  • First time homebuyers only, unless purchasing in targeted area
  • FHA 30-year fixed loans only
  • 100% financing
  • Down Payment Assistance (DPA) grant of 3.5%, does not have to be repaid
  • Program Income limits apply
  • Minimum credit score of 660
  • Reservation fee $100
            MORTGAGE CREDIT CERFICATE

  • First time homebuyer unless purchasing in a targeted area
  • Income and acquisition limits apply
  • 30 year fixed rate (lender sets rate)
  • Federal Tax benefit
  • FHA, Conventional, VA, or USDA Rural Housing financing eligible
  • Reservation fee $500
                           NEXT HOME (NH)

  • Does not have to be a first time homebuyer
  • Income limits apply
  • 30 year fixed rate (set by IHCDA)
  • Minimum credit score of 660 for FHA or minimum of 640 for Conventional
  • FHA or Conventional financing eligible
  • 2 year affordability period
  • DPA-3.5 % of purchase price or appraised value, whichever is less for FHA or 3% of purchase price or appraised value, whichever is less for Conventional
  • No cash back at closing except for what the mortgagor paid into the loan
  • Reservation fee $100
               AFFORDABLE HOME (AH)

  • First time homebuyer unless purchasing in a targeted area
  • Income limits apply
  • 30 year fixed rate (set by IHCDA)
  • Minimum credit score 660
  • FHA financing eligible
  • Reservation fee $100
                        MY HOME (MH)

  • Does not have to be a first time homebuyer
  • Income limits apply
  • 30 year fixed rate (set by IHCDA)
  • Minimum credit score of 640 for loans having LTVs equal to or less than 95%. LTVs greater than 95%, the credit score that is required may vary
  • Conventional financing eligable
  • Master Servicer must underwrite all loans having LTVs greater than 95%
  • Reservation fee $100

Contact us to get started on any of the grant programs.


3. USDA Loan Program  

In Indiana, the USDA operates the Single Family Housing Guaranteed Program.

This program allows lenders to work with families living in eligible areas fix this link to make home owning a reality. Recipients of this program are eligible for building, rehabilitating, improving, or relocating a particular dwelling in qualified areas. The USDA strives to promote home ownership opportunities, which supports the surrounding the communities and blossoms the overall quality of life in these areas. 

However, applicants must meet certain requirements. A few are listed below:

  • Income eligibility 
CITY/STATE
ELIGIBLE INCOME
Indianapolis-Carmel-Anderson, IN
$32,050-$78,200 (1 to 4 person household)
Indianapolis-Carmel, IN (METRO)
$34,950-$80,350 (1 to 4 person household)

Contact us (link) to find more eligible income areas and a list of the lenders that offer USDA loans. 

  • Agree to personally occupy the dwelling as your primary residence indefinitely
  • Be able to purchase property that is eligible for the program. To find out if a property is eligible, click here to see the USDA's eligibility map.


4. VA Loan Program

The loan program helps service members, veterans, and surviving spouses become homeowners through the Veteran Affairs Loan Program. This program guarantees a home loan benefit, as well as other related arrangements to help home buyers to build, repair, retain, or adapt a residence for a personalized home of your own. The loan program is provided by certain lenders (link), and the VA guarantees a portion of this loan, which allows the lender to offer more freedom to work with your specific needs. This loan program allows a home buyer to purchase a home with no money down, as well as at a competitive interest rate.

See table below to find out if you are eligible for a VA loan and what is needed for evidence.

CATEGORY
EVIDENCE TO APPLY
Veteran
DD Form 214- required to have a copy showing the character of service and the narrative reason for separation.
Current or former National Guard or Reserve member who has been activated Federal active service
DD Form 214- required to have a copy showing the character of service and the narrative reason for separation.
Active Duty Service Member
A current statement of service including: 
  • signed by the adjutant, personnel office, or the commander of the unit or higher headquarters
  •  showing your full name, social security number, date of birth, entry date on active duty, the duration of any lost time, and the name of the command providing the information
Current National Guard or Reserve member who has never been Federal active service
A statement of service including:
  • signed by the adjutant, personnel office, or the commander of the unit or higher headquarters
  • showing your full name, social security number, date of birth, entry date on duty, the total number of creditable years of service, the duration of any lost time, the name of the command providing the information
Discharged member of the National Guard who has never been activated for Federal active service
NGB Form 22, Report of Separation and Record of Service, for each period of National Guard Service
                                       -OR-                                           NGB Form 23, Retirement Points Accounting, and proof of the character of service
Discharged member of the Selected Reserve who has never been activated for Federal active service
Copy of your latest annual retirement points statement and evidence of honorable service
A Surviving Spouse in Receipt of DIC benefits
Submit VA form 26-1817 and veteran's DD214 (if available).
Also include veteran's and surviving spouse's social security number on the 26-1817 form
A Surviving Spouse and not receiving DIC benefits
Submit the following to the appropriate Compensation and Pension office:
  • VA form 21-534
  • DD214 (if available)
  • Marriage License
  • Death Certificate or DD Form 1300- Report of Casualty

Contact us to obtain a Certificate of Eligibility through our lenders.

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