Home Buying in Fremont>Question Details

mithildeshmu…, Home Buyer in Fremont, CA

Are there loans which does not require 20% down payment?

Asked by mithildeshmukh, Fremont, CA Fri Dec 21, 2012

I don't have the finances to put down 20% on a home. I am looking to buy a condo/apt in Fremont, CA which might cost around 150k. Can I do that? Are there loans available?

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Hi mithildeshmukh:

I won't repeat what the other professionals have shared regarding your primary question. Instead, here are my “Top 4” suggestions as you move forward with your quest for homeownership:

1) Find a professional Realtor® to work with to protect you interests.
Simply put, your Realtor® will be able to answer initial key questions and guide you through the process. One of the key advantages of involving your Realtor® is access to seasoned Mortgage Broker/Bankers with a track record of getting the job done. You can check to make sure an Agent is a Realtor® by going here: http://www.realtor.org/rofindrealtor.nsf/pages/FS_FREALTOR?O…

2) Obtain a "True Pre-Approval" (your most important step in my opinion).
You MAY need to improve your credit score, increase cash reserves, etc. before buying; however, at least you will have a roadmap to eventually purchasing if this is the case. Furthermore, this step can save you from wasting money on a purchase that does not close escrow!

3) Make sure you obtain access to your local AND regional Realtor® MLS data via an automated search your Realtor® should most certainly create for you; here's why:
MLS Data Accuracy – Where to search if you’re “without Realtor®”

4) Avoid Dual Agency!
There are specific duties an Agent must provide. When one individual represents both Buyer and Seller conflict between two of the most important duties occur.

2 votes Thank Flag Link Fri Dec 21, 2012

Absolutely!! There are loans with as little as 3% down payment. This loan requires a minimum credit score of 720.

We also have 5% down payment programs and 3.5% down payment FHA loans.

There are also loans available that will give you 3% toward your down payment and closing costs (as long as you meet the income requirements).

All of these loans require mortgage insurance.

You are in luck! My office is located in Fremont and I would be happy to meet you after 5pm or the weekends to discuss in greater detail.

You can reach me at cgravelle@diversifiedmg.com
1 vote Thank Flag Link Fri Dec 21, 2012
There are plenty of loans with less than 20% down my friend. You can go FHA* with 3.5% down payment or go conventionally with as little as 5% down - both will carry MI (mortgage insurance), but the mortgage insurance with a conventional loan is preferred because of its reduced costs.

A condo is a whole different animal, however when it comes to purchasing a home. For FHA, you want to make sure the complex is FHA approved before purchasing (your realor can look this up, or I can as well). You also want to check the owner-occupanycy of the complex as well (50% or better).

For a conventional lender, you will want to check owner occupancy too - it should be over 50% with 20% down, most MI companies prefer 70% -- but we do have a mortgage insurance lender that will insure the loan down to 50%.

Owner occupancy is important to lenders with condo's as a complex that is predominantly rentals will often suffer with vacancies, late HOA payments and more, making it a higher risk for lenders.

Condos are getting better, but when the recession hit, they were the first to default. When they defaulted and were sold short or foreclosed upon, many HOA's suffered - some to the point of complete failure. When an HOA fails, the complex is not taken care of - landscaping, repairs, leaks, and even the insurance can be cancelled. Luckily, most were able to survive, but lenders still look at them as higher risk. You want to make sure that both your realtor and your lender do the homework first when buying a condo.

If all the homework is done and everything else looks good, then by all means jump in. The economy is turning to the good and that could mean some good appreciation in most areas - especially a city like Fremont.

Good luck!
1 vote Thank Flag Link Fri Dec 21, 2012
As stated below, start with a meeting with a lender to find out what type of loan you can get and the minimum down payment required. Keep in mind that you will also need approximately 3% of the purchase price for closing costs in addition to the down payment – you can build that into your offer and ask the seller to pay for it, but in the hyper-competitive market in the East Bay, that will put you at a disadvantage.

I’d recommend you start by talking to:

John J Dutra, Sr. Loan Consultant
39644 Mission Blvd.
Fremont, CA 94539
510-364-0764 (cell)
510-353-9984 (fax)
jdutra@rpm-mtg.com (email)
http://www.rpm-mtg.com (website)
CA DRE License # 00823740
NMLS # 248841
0 votes Thank Flag Link Sun Dec 23, 2012
Hi, yes there are many different loans you can get depending on your FICO score.... but you will not find a condo or townhome in fremont for 150,000 you can buy a mobile home in a mobile home par and there are a couple of nice ones in fremont one on auto mall and one in the Niles area.....let me know if I can answer any other questions.....Merry Christmas! ....Dawn 510-909-0373
0 votes Thank Flag Link Sat Dec 22, 2012
Yes. Sometimes conventional loaners will only ask for 10% down. Or FHA loans you can get for 0% down sometimes. I don't recommend that though. If you search google for topics on people who put 0% down on a house and then they sold the house 5 years later and lost money at closing. That's the worst thing that can happen to you.
0 votes Thank Flag Link Fri Dec 21, 2012
Hello mithildeshmukh,

You may also consider City of Fremont's 'Below Market Price (BMP) Homeownership Program', here is the link from City of Fremont website :


Though homes under that program are limited it is something to consider.

We as Realtor can inform you on those homes availability.

In recent past I have seen buyers, borrowers are benefiting with lower down payment program and keeping their monthly payments somewhat similar to their rent payment.

Based on market conditions in terms of demand and supply of homes and getting into a contract could change when you enter into a market.

Best Regards,

Prasad Bodas
0 votes Thank Flag Link Fri Dec 21, 2012
There are loan for less than 20% down.

FHA provides loans for first time buyer with as little as 3% down
If you are interested in a condo you will need to make sure the complex is FHA approved.

There are also conventional loans with as little as 5% to 10% down.
(this program is for very highly qualified buyers)

The CalHFA program offers first time buyer loans with little or even no down payment.

Best of luck to you.

Kawain Payne, Realtor
0 votes Thank Flag Link Fri Dec 21, 2012
There are some that may require 20% down --- as in the case of a co-operative such as Woodstock in Alameda. But this is not at all the case with other home purchases elsewhere.

Interesting at how often buyers ask this question.....it may have been the requirement decades ago, but there are different kinds of loans for different types of purchases by people at different income levels and credit scores.

The first thing you should do is talk with a lender -- be it at your local bank or credit union or an independent mortgage broker who can prequalify you for a loan. And no, 20% down payment is not always a prerequisite for a single family home (condo or townhouse).

Good luck to you.
0 votes Thank Flag Link Fri Dec 21, 2012
Hello Mithildeshmukh,

There are loans out there that do not require 20% down. I would check with your preferred loan officer and ask. If you do not have a loan officer, I have one I can refer to you.

You will need more than 150k to purchase a condo in Fremont.


0 votes Thank Flag Link Fri Dec 21, 2012
Yes, as pointed out below there are several other options. Contact a local lender and they can run through your options.
0 votes Thank Flag Link Fri Dec 21, 2012
There is the 3.5% down FHA loan and for some with good credit, there are 5% and 10% down conventional programs. I encourage you to seek out a lender in your community and go through the application process. Only then, will you know what's available to YOU!
0 votes Thank Flag Link Fri Dec 21, 2012
yes you can. There are several options, as low as 3.5%.
If you need a list of loan officers, I can refer you a few.

0 votes Thank Flag Link Fri Dec 21, 2012
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