Home Buying in Brooklyn>Question Details

Craig.atkins…, Home Buyer in

Is there any way to avoid a 20% down payment for a condo or townhouse in the $1 - $1.25 range? I have the income but not cash reserves

Asked by Craig.atkinson, Tue Mar 26, 2013

Pls don't tell me about FHA or Veterans programs.

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Kathryn Lilly’s answer
Building a bigger down payment is what you need to do.
The best way to do that is to get into the market; buy a lower priced, co-op or condo in an area/building that with high appreciation prospects. You will build up income tax deductions, put all your income tax savings into a savings account. Add some value to your apartment and re-sell it in a couple of years. If you have bought into the right building, in the right area, and added some value to the apartment...all the profit you make ( up to $250,000 as a single person) is tax free and can go towards your next move. I always say it takes 3 moves to your dream home. But if you do not make that first move, the market will keep running away from you, trying to save for something that is always moving faster than you, you will never get there.

Kathryn Lilly, Broker
Realty on the Greene, LLC
0 votes Thank Flag Link Tue Mar 26, 2013
Craig, chances are FHA wouldn't be available to you, unless the condo is HUD approved. Even if it was FHA approved, you'd still need more than 20% to make it work, if its a one unit condo. Reality is that if you have the income to qualify for such loan, but not enough down payment and reserves to qualify for it, then you can do one of 3 things:

1. You can simply continue saving until you do have enough to qualify for such purchase.

2. Or you can simply look for a cheaper home that you can afford, based on the money you do have saves up for down payment and proper reserves. Why in the world would you think it's a good idea to use every penny you have right now, end up with a mortgage payment and NOT have some savings to tap into in case something doesn't go as planned?

3. Continue to waste your time looking for a fix that doesn't exist. No lender would lend at a high lian amount, at a high loan-to-value without you having enough down payment and reserves. Do you have any idea how expensive that FHA payment would be even if you did have enough down payment?

Trust me, pick options 1 or 2. Nothing good can come of option 3. Good luck!

If my response was helpful, consider clicking BEST ANSWER!

Javier Meneses
Senior Loan Officer
NMLS #23130
310 Crossways Park Drive
Woodbury, NY 11797
(516) 606-9648
0 votes Thank Flag Link Tue Mar 26, 2013
Then you probably already know the answer to the question.
Is the Condo in a rural area for a USDA loan?
0 votes Thank Flag Link Tue Mar 26, 2013
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