For many first-time home buyers, the thought of making a down payment can be intimidating. However, a common misconception is that you must put down 20% to qualify for a mortgage. In many cases, you could be eligible for a home loan with as little as 3% down. Plus, when you purchase an NHC home at the lowest price per square foot on the market, your buying power will immediately increase, as you could afford larger down payments on our homes than other similar options.

There is another financing solution that has seen a resurgence in recent years, however: first-time home buyer loans with zero down. This allows prospective homeowners who may not have enough saved for a large down payment to purchase their new house without needing to worry about bringing a large sum of cash to the table. In this blog, we’ll help you better understand your options for first-time home buyer loans with zero down and how NHC’s affordable, newly constructed homes could help you boost your buying power.

What Are Zero-Down Home Loans?

First-time home buyer loans with zero down are more common than you may think. These loans are typically federally insured since lenders take on more risk. For example, let’s say you find one of NHC’s lowest price-per-square-foot homes in Texas. With a zero-down home loan or downpayment assistance loan, you could bypass the initial down payment on your new home and move right in, giving you immediate equity in a newly constructed home you can truly afford.

For most first-time home buyer loans with zero down, you may need to meet several requirements to qualify. Your credit score will likely need to be around 600 or higher, and you may need to fall into a specific income range. For example, a new program from United Wholesale Mortgage requires that applicants make no more than 80% of their area’s median household income.

Now, at NHC, we work hard to ensure that our spacious homes are listed at the lowest price per square foot on the market. On top of this, we also help buyers secure fair financing. We’ll work closely with you to determine the best path forward for securing an affordable mortgage. Feel free to contact our NHC Mortgage office to learn more about your loan options, including first-time home buyer loans with zero down.

VA and USDA Loans

Outside of NHC Mortgage, there are two common routes applicants go when looking to secure first-time home buyer loans with zero down. The first is a VA loan. This is a type of zero-down home loan that is exclusively reserved for active and retired service members or surviving spouses of a deceased veteran. They are federally insured by the Department of Veterans Affairs. To qualify, you’ll likely need to meet the following requirements:

• 90 or more consecutive days served during wartime.
• 181 or more consecutive days of active service during peacetime.
• More than 6 years of active service in the National Guard or Reserve.
• You’re the qualifying spouse of a service member who died in the line of duty.

Now, for those who may be looking at real estate in rural and suburban areas, USDA loans are another first-time home buyer loan option with zero down. These are backed by the United States Department of Agriculture. Several of NHC’s affordable properties, including Waterside at Cedar Creek, are located in eligible areas. Combined with the low price of our homes, a zero-down home loan such as a USDA loan could boost your buying power and help you secure your slice of the American Dream at a cost that won’t break the bank.

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The Pros of Zero-Down Home Loans

On top of the money first-time home buyer loans with zero down can save you, there are a few other benefits that prospective homeowners can enjoy.

Improved Buying Power

Armed with a zero-down home loan, you may find your ability to purchase a home is much stronger than you’d imagined. These types of loans expand the accessibility for a range of buyers, including those with less desirable credit. This can go a long way when it comes to buying an NHC home, as our lower prices per square foot could help you increase your overall down payment and save on potential private mortgage insurance costs.

Preservation of Savings

First-time home buyer loans with zero down help you keep more money in your savings accounts. Without having to worry about a large down payment, you could enjoy greater financial flexibility. For example, if you wanted to put a pool in the backyard of your NHC home, the savings you’ll enjoy on our newly constructed homes could bring you that much closer.

Immediate Homeownership

With a zero-down home loan, you won’t have to worry about renting to own. With immediate equity in your property, you can begin building generational wealth for you and your family right away.

How much might your monthly costs be for one of NHC’s affordable homes? Check out our mortgage calculator to learn more about your payment options for our affordable homes could look like.

FAQs

Are there any first-time home buyer loans with zero down available?
Yes. On top of VA and USDA loans, some lenders may also offer homeowners zero-down home loans when they apply for a mortgage.

What credit score is needed for a home loan with no down payment?
While the required credit score will vary depending on the lender, it is best to assume you’ll need a credit score of around 600 or higher to qualify for a zero-down home loan.

Can I get approved with no money down?
Yes! You can get approved for a mortgage with no money down. Talk to your preferred lender about your potential options.

Should I borrow money to cover my down payment?
If you can afford to put money down yourself, this is the best option. However, borrowing money to cover a down payment is another great option for securing a home.

Can I use a tax-free gift from my family to buy a house?
You can use a financial gift from your family to buy a house, however, you may be subjected to the gift tax depending on the amount you use.