What Are Down Payment Requirements For Home Purchase

This BLOG On What Are Down Payment Requirements For Home Purchase Was UPDATED On June 29, 2017

There are different down payment requirements for home purchase mortgage loans.

  • For most FHA mortgage loan programs, the minimum down payment requirements are 3.5%. 
  • There is no down payment requirements on VA Loans.
  • VA borrowers can actually purchase a home with no cash and even have their closing costs covered.
  • Closing Costs can be covered by lender credit or sellers concessions.
  • Minimum down payment requirements on home purchase on conventional loans is 3% down for first time home buyers.
  • First time home buyers is defined as a home buyer who had no ownership in a home for past three years.
  • 5% for owner occupied homes and 10% down payment for second and vacation homes on conventional loans.
  • 15% to 20% down payment on investment homes with conventional loans.
  • NON-QM and Bank Statement Loans require 20% down payment.

FHA Loans Down Payment Requirements For Home Purchase

For FHA mortgage loans, the minimum down payment requirements are 3.5% if a mortgage loan borrower has credit scores of 580 FICO or higher.

  • For those FHA mortgage loan borrowers whose credit scores are below 580 FICO, the minimum down payment requirements are 10%. 
  • The lowest credit score that a mortgage loan borrower will qualify for a FHA mortgage loan is a credit score of at least a 500 FICO score.

Down Payment Requirements For Home Purchase With Bad Credit

Not every mortgage broker has access to wholesale mortgage lenders who can qualify a mortgage loan borrower with bad credit scores.

  • I can help borrowers with bad credit since we have no lender overlays. 
  • Most mortgage lenders require a minimum credit score of 640 FICO or higher and a few will go down to credit scores as low as 620 FICO. 
  • HUD Guidelines on minimum credit scores required on FHA Loans is 580 FICO with 3.5% down payment.
  • For those with credit scores between 500 FICO and 579 FICO, the minimum down payment requirements is 10%. 
  • For mortgage loan borrowers with credit scores over 580 FICO, the minimum down payment requirements are 3.5%.

Down Payment Requirements For Home Purchase On Conventional Loans

  • The minimum down payment requirements for conventional mortgage loans is 3% or 5% for owner occupied homes. 
  • Second homes and vacation homes mortgage loan down payment requirements used to be 5% but Fannie Mae and Freddie Mac has just changed the down payment requirements for second homes and vacation homes to 10% just recently. 
  • Mortgage rates on conventional mortgage loans are higher than FHA insured mortgage loans and the credit requirements of conventional mortgage loans are more stricter than FHA insured mortgage loans. 
  • It is possible to get a conventional mortgage loan with a credit score as low as 620 FICO but mortgage rates will be much higher than if credit scores were at 660 FICO.

No Down Payment Requirements For Home Purchase With VA Loans And USDA Loans

I have excellent VA mortgage loan programs . We have VA and USDA mortgage lenders that will qualify a veteran with credit scores below 580 FICO with open collections and high debt to income ratios.

If you are interested in a bad credit mortgage loan or a high debt to income ratio mortgage loan, please contact me at 262-716-8151 or email me at gcho@gustancho.com or you can always visit me at www.gustancho.com .

Gustan Cho, NMLS ID 873293

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The information contained on Gustan Cho Associates website is for informational purposes only and is not an advertisement for products offered by The Gustan Cho Team @ Gustan Cho Associates or its affiliates. The views and opinions expressed herein are those of the author and/or guest writers of Gustan Cho Associates Mortgage & Real Estate Information Resource Center website and do not reflect the policy of Gustan Cho Associates Lenders Network, its officers, subsidiaries, parent, or affiliates.

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