Owning a house is a dream of many. You want a space to call your own, a place where you can build your own memories and have proper security. However, oftentimes, people don’t have any savings or stable income to make such a big purchase. This makes them question, “How to buy a house with no money?” 

If you’re wondering the same, this article is for you. Let’s discuss how to buy a house with no money, covering different $0 down loan options to finance your home purchase.

What is a $0 Down Loan or Mortgage?

Typically, $0 down loans or mortgages are in which you, as a buyer, don’t have to make any down payment to finance your home purchase. 

In simple words, it’s a type of home loan through which you can purchase a property without making traditional down payments of 20% or 30%. 

It’s typically backed by the U.S. Department of Agriculture (USDA) and the Department of Veterans Affairs (VA). Both of these are government bodies that minimize the risk of scams to lenders. 

How to Buy a House with No Money Down?

If you don’t have money in the bank or neither have a stable income source to buy a house, here are some ways you can try for “how to buy a house with no money:”

Apply for a VA Loan 

The first thing you can try is to verify if you are eligible for a VA loan. It’s a zero-down payment mortgage backed by the US Department of Veterans Affairs that aims to help army servants secure a house without feeling burdened by financial challenges. 

If you are a member of the US military, a veteran, or a surviving spouse, you can apply for the loan. The criteria vary depending upon the years of service, whether you were deployed during war or in peacetime. Here’s an overview of the general eligibility criteria for VA that you should meet to secure this loan:

• 90 consecutive days of service during wartime 
• 181 days of active service during peacetime 
• 6 years of service in the National Guard or Reserves
• Have a credit score of 580-620

Remember, if you were discharged due to any hardship or government convenience, you can still opt for the VA loan. So, don’t miss out on this opportunity and make your dream of buying a home without money a reality! 

Use the First-time Buyer Program 

In the US, there are many first-time buyer programs that you can apply for to easily finance your new home purchase. These programs provide you with grants or some low-interest loans that you can rely on to cover your down payments and closing costs. 

Some common programs you can avail of include the Houston Homebuyer Assistance Program, which offers $30,000 to income-qualified Houstonians who are first-time homebuyers or have lost their houses during Hurricane Harvey. It’s a no-interest, forgivable loan that’s fulfilled if the buyer lives in the newly bought house for five years.

The eligibility criteria for this is given as:

• You should be a US citizen 
• Lived in Houston during the Hurricane Harvey 2017
• Willing to attend an 8-hour-long homebuyer education course 
• Household income at or below 120% of the area’s median income 

Note: If you leave the house before completing five years, you are required to provide a specific portion of the loan back to the governing body. 

Go for the USDA Loan 

How to buy a house with no money may seem like a foolish question to many. However, there are initiatives like the USDA loan that actually make this possible for you. 

The USDA loan, offered by the U.S. Department of Agriculture, is for individuals who live in rural areas and want to move to a better place but can’t afford the down payment and closing costs. 

It has two streams: Direct USDA loan and the Guaranteed, and both require a 0% down payment. Let’s look at the requirements you have to fulfill to qualify for the USDA loan:

• Total adult household income should be under 115% of the county’s median household income
• Debt-to-income ratio of 41%
• Have a minimum credit score of 640

Ask for a Down Payment as a Gift from a Family Member 

Another thing you can do for “how to buy a house with no money” is to request a down payment as a gift from any family member. You can then use this amount to secure a loan to finance your home-buying process. However, to make sure your lender actually accepts the gift payment, you have to do a few things:

• Mention your relationship with the family member who gifted you money 
• Share the exact amount you got 
• Provide the address of the property you are going to purchase 

Benefits of $0 Down Loans to Buy a House

The benefits of $0 down loans for your how-to buy a new house with no money journey are:

• No down payment is required, which means you can purchase the home immediately without having to save for a long time or exhaust your cash reserves.
• Government-backed loans, such as USDA and VA loans, allow you to secure loans with lenient conditions, such as low interest rates and manageable monthly installments.

However, there are also some downsides to $0 down loans. For instance, the lender may ask for high interest rates or good credit scores to grant the loan, which can be quite troublesome. 

Conclusion 

How to buy a house with no money is no longer a fictional question. Instead, opportunities like family gift down payment and $0 down loans like those from USDA and VA make it possible for you to secure a house sooner than expected. Are you trying to sell your property and are worried about the stress of realtor fees and costly repairs? Or do you want to invest in a new home but are unable to find reliable options? There’s nothing to worry about. Contact Landen Cade today and make your home selling and investing journey smooth and affordable with a $0 commission.