Home Loans California & Arizona

How to buy a house in California with little or no money down

July 30th, 2018 4:01 PM by Nathan Rufty

Home ownership in California is the dream of many people, but usually whats stopping you from making this dream come true is finance, most people don’t have large amount of money to put as a down payment for a house or pay for closing cost. Luckily in California there are several home loan programs that are available that may help you buy that dream home for little or no money down. Even if you have the money to put as a down payment it will always be a wiser decision to find a program that offers you the most financing, and then you can use your savings for other things like investing.

Finding a home to buy is fairly easy, the next challenge is finding a way to purchase the property without any money out of your pocket. Well, there are ways you can do this. Here are some ways you can obtain the property without putting a dime out of your own pocket in California.

VA Loans in California

If you are a veteran, you can purchase the home of your dreams in California with no money down by simply going to the federal government for help. By going through the Department of Veterans Affairs, you can obtain the money you need. The only drawback to this type of deal, is you can only buy one property at a time. But it is a good start for the new investor, who also happens to be a former military man.

VA home mortgage loans are similar to many conventional home mortgage loans but they do have many great benefits that are not found in conventional loans such as: you do not need a down payment, your credit scores can be lower than what is required for conventional loans, and you can "rolled" the closing and loan fees back into the mortgage thus making it a 100% financing loan.

They have some of the same advantages of the VA home mortgage loans such as: they are easier to refinance, more lenient on the credit scores to qualify, and certainly lower down payment than conventional loans. The FHA home mortgage loan down payment is currently 3.5 of the purchase price of the home.

VA Home Mortgage Loan Eligibility Requirements

A veteran will have to get a Certificate of Eligibility that is issued to by the military to qualified veterans. The Certificate of Eligibility will also include the entitlement amount, which is the portion of the mortgage loan that the VA will guarantee. You can get the Certificate of Eligibility from the VA or you can have your mortgage lender get it for you on the Internet.

FHA Loans in California

An FHA loan is a home loan that the U.S. Federal Housing Administration (FHA) guarantees. Private lenders like banks and credit unions issue the loans, and the FHA provides backing: If you don’t repay your loan, the FHA will pay the lender instead. Because of that guarantee, lenders are willing to make substantial mortgage loans in cases when they’d otherwise be unwilling to approve loan applications. Here are some of the advantages of a FHA Home Loan.

Advantages of FHA Loans

1. Easy Qualifications

FHA does not directly lend money to the homebuyer, what they do is insured the mortgage. This will give lenders the incentive to give better loan terms and make it easier for you to get qualified.

2. Low Credit Requirements

In today's housing market you need to have pretty darn credit to qualify for a conventional loan. You can qualify for a FHA Home Loan with less than perfect credit scores, even as low as 585 credit score. But most lenders will want a credit score of 620 or above. If you have had a bankruptcy in the past you have a better chance of getting a mortgage with the FHA Home Loan Program than a conventional loan.

3. Low Down Payment.

This is probably is the best advantage to a FHA Loan Financing. You only need a 3.5% down payment versus 20% or more for conventional loans. You really do not have the have the down payment, it can come from a family member, employer, or charitable organization. Conventional loans do not allow this.

4. Less Fees

FHA Home Loan Mortgage has very competitive interest rates because they are insured by the Federal government. You need to compare their rates with rates of conventional loans.

Fannie Mae & Freddie Mac Conventional Programs

Before buying a house used to require at least 20% of a down payment, but thanks to Fannie Mae & Freddie Mac new programs like Freddie Mac Home Possible®  and Fannie Mae HomeReady® Mortgage now you can purchase a house in California with a very low down payment, plus the fact that these programs offer many great features like:

  • Minimum credit requirements
  • Low Down Payment
  • Easy Guidelines
  • Fast Closing
  • And more.
buy a house in California with little or no money down

Down Payment Assistance Programs in California

Saving up enough money to make a down payment on a home can be next to impossible for many consumers. Because of this, the state of California related a  variety of programs available to assist people who are interested in buying a home, but just do not have enough money available for a down payment. There are quite a few down payment assistance program options available for consumers without money for a down payment.

Here is a list of the top 12 Down Payment Assistance Programs in California:

  • MyHome Assistance Program
  • Brentwood Down Payment Assistance Program
  • CalHome Program
  • California Homebuyer's Downpayment Assistance
  • Downey First-time Homebuyer’s Program
  • Emeryville First Time Homebuyer Loan Program
  • Extra Credit Teacher Home Purchase Program
  • First Home Mortgage Program
  • GSFA Platinum Program
  • Monterey County Down Payment Assistance Program
  • Riverside Down Payment Assistance Program
  • Santa Ana Downpayment Assistance Program

If you are ready to buy a house, but you just don’t have the down payment, It’s OK call Nathan Rufty at (909) 503-5600 and he will guide you through the whole process, to ensure that he will find the right program that will get you the most for your situation.

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