Home Loans California & Arizona

How Can I Buy A Home With No Down Payment in Southern California?

April 5th, 2014 9:07 PM by Nathan Rufty

no money home loan program

That is a very good question because it seems as of late a lot of home buyers have very little or no money for a down payment. It does not take that much money to purchase a home in California. We have 2 traditional 100% home loan programs with VA and USDA.

Yes you can purchase a home in California with no down payment and very little closing cost. 

Lets explore these 2 one of a can lending programs to purchase a home in Southern California.

The first one is VA, eligible to active and retired service members. You have a benefit to purchase a home with no money down. That is a 100% financing, one loan with no monthly mortgage insurance. You are allowed to use your VA benefit to purchase a home over and over, as long as you are in good standing with the Veteran's Affair. Other benefits to the program are:

  • No money down
  • There are county loan limits
  • No monthly mortgage insurance
  • Can add an Energy Efficient Mortgage to improve the overall efficient of the home
  • No pre-pay penalty, can pay off the loan at anytime
  • VA Funding Fee is waived if the veteran is disabled by the VA at 20% or more
  • Once in the program, you can refinance to a lower interest rate without an appraisal, known as an IRRRL (Interest Rate Reduction Refinance Loan) also called the Streamline Refinance 
  • Can utilizing a down payment assistance home loan program to assist with closing costs
  • Termite report in California is required and the Veteran can not pay for the report, but can pay of any repairs
  • There are non-allowable fees the Veteran can not pay for, saving even more money when you take advantage of this program
The second zero down home loan is the USDA-RD home loan that is available in selective areas of the county in which you are looking to purchase a home in. Designated as a rural area of the county to open opportunities for families to purchase home with no money down. Benefits of the USDA home loan program are:
  • 100% financing - no down payment is required
  • Fixed interest rate for 30 years
  • No maximum purchase amount, buyer most qualify based on income and credit
  • Income limit is set by each county and determined by the dependents in the household
  • Closing costs be financed in the loan if the appraised value comes in higher than the agreed upon purchase price and this is the only home loan program that this can be done with a purchase transaction
  • Not Limited to first time home buyers
  • No pre-pay penalty for paying the loan off early
There are Down Payment Assistance (DPA) home loan programs that offer up to 3% on a FHA loan. The FHA program requires that you bring in 3.5% down payment of the purchase amount and the DPA can bridge the gap up to 3% leaving you with only the .5% to bring in (minimum contribution is $1000).

You think you can purchase a home because you have limited funds to do so, think again. Our industry is always changing, adding new products to offer in order to increase profit for lending companies. Now is time to take advantage in purchasing a home on one of these lending programs.

Call me direct at 909-503-5600 to discuss your plans of owing a home this year or email me your contact information.

By Nathan Rufty

Posted in:General
Posted by Nathan Rufty on April 5th, 2014 9:07 PM

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