Buying a Home With Little to No Money Down in Mendocino County
The Federal Housing Administration (FHA) insures certain loans that allow up to 97.5% financing for eligible borrowers. Since it only requires 3.5% down, the FHA loan remains a highly popular alternative to conventional home financing for first time borrowers, as well as anyone who doesn’t have the funds available to make the typical 10%-20% down payment.
Contrary to popular belief, the FHA does not provide the loans. Instead, the FHA approves certain lending institutions like banks or mortgage companies to offer the loans; the FHA simply insures them. Because of their government backing, lenders can offer aggressively low mortgage rates on FHA loans and are often able to extend financing to borrowers with less-than-perfect credit. The FHA loan’s slightly less strict underwriting guidelines make it one of the most accessible home loan products in today’s marketplace. Learn more about FHA Loans >
USDA Rural Housing Loans
The USDA Rural Housing Loan program is a zero money down home loan that is also insured by the federal government. These loans are backed by the United States Department of Agriculture (USDA) and can be a great financing option for lower and middle income borrowers in Mendocino County.
USDA loans have very specific eligibility criteria for both borrowers and the property. Borrowers’ income must fall within certain limits (check to see if you meet income eligibility requirements here), and the property itself must be located in an area the USDA has designated as rural (check the USDA property eligibility map for Mendocino County here).
Don’t let the ‘rural housing’ name discourage you. You may be surprised to learn that there are many USDA-eligible areas within or very close to city and town limits. In fact, at the time of this writing, the majority of Mendocino County is included in the USDA’s eligible zone.
In addition to being a 100% financing option with no minimum down payment, USDA loans can also allow borrowers to finance part of their closing costs into their total loan amounts, making it one of the few loans where borrowers can close without having to pay anything upfront. Learn more about California USDA loans >
Available to active duty, veterans, surviving spouses of veterans, reservists and other service branches of the U.S. Military, the VA loan program offers zero money down, competitive interest rates and no private mortgage insurance for qualified borrowers.
The eligibility requirements related to military experience are very specific. For instance, borrowers must have done at least one of the following: served during wartime for at least 90 consecutive days, served during peacetime for 181 consecutive days, served for six or more years in reserves or National Guard, or you are married to a service member who perished in action or from a service-related ailment. Other qualifications may apply and are subject to change. Ensure you have all the necessary documents and meet all eligibility requirements before you submit your application. Learn more about California VA mortgages >
1% Down Conventional Mortgage
This program provides assistance to otherwise qualified borrowers who are unable to come up with at least 3 percent down for a conventional mortgage. The way it works is, the borrower – having met all other necessary eligibility requirements – provides 1% of the home’s purchase price as their share of the down payment, and we provide the other 2%, giving a total of 3% down.
This innovative program allows a borrower to obtain conventional financing at a highly competitive interest rate and with little money down. Again, with median listing prices in Mendocino County approaching $520,000, it’s nice to know you have options when it comes to finding affordable home financing. Learn more about our 1% Down Conventional Mortgage program >
Have questions? We’re here to help.
At Empower Capital Group, we offer all of the aforementioned programs – plus some Fannie Mae and Freddie Mac programs that require between 3%-5% down – to home buyers in Mendocino County. Most of the programs listed in this post are available to first time and repeat buyers. If you would like to learn more about any of our low and no money down home loan solutions, please give us a call at (707) 522-1887.