Do I still need a down payment if I am a first time home buyer?

Asked by Nichol546, San Francisco, CA Thu Jan 19, 2012

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Astrid Lacit…, Agent, San Francisco, CA
Thu Jan 19, 2012
What you are not being told is that It MIGHT be possible to get into contract with little or no down, but it is not very likely.

The operative word here is MIGHT. In a competitive offer situation, the seller will naturally take the offer with the largest downpayment. The only way you would succeed over buyers with 20% or more down is by grossly overpaying for the property, and the odds are it will then not appraise out.

My suggestion_ keep saving for that down.
Astrid Lacitis
Keynote Properties
415 860 0765
415 860 0765
1 vote
Gregory Karr, , San Francisco, CA
Thu Jan 19, 2012
The SF mayor's office of housing has a down payment assistance program and there are grants available if you are a teacher, fireman, police officer, etc. With all that assistance you should be able to keep your out of pocket expenses very low indeed. However, there are lessons to be learned since the mortgage meltdown and the recession; namely, put some cash in the deal. A good down payment of 20% to 30% is recommend. Do you have job stability? Without it, getting into a home with little or nothing down is not recommended. If you would like to consult with me so you can make a decision, give me a call.
1 vote
Claudia Mull…, Mortgage Broker Or Lender, Fremont, CA
Thu Jan 19, 2012
Depending on your income, if you make $81,800 or below, there is an FHA program that requires you to have 1% of the purchase price of your own funds and then a second mortgage is given to you for 3% of the purchase price. This second can go toward your down payment of 3.5% total and a portion of your closing costs.
You can have the seller credit you $$ for your closing costs and get in with your 1% down.
1 vote
Greg Bryan J…, Agent, San Francisco, CA
Thu Jan 19, 2012
Yes, But just one additional comment in addition to the FHA loans which allow lower downpayments depending on what part of San Francisco you are looking at moving to, there may be special loan programs available. For example I am aware of one that covers a lot of the South of Market properties that allows for just 5% down.

Greg Bryan JD/MBA
Broker Associate - GB and Associates/McGuire/Urban Bay Properties
Cell (415) 640-4341
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1 vote
Gabriel Rojas, Agent, San Francisco, CA
Thu Jan 19, 2012
Like others were saying, you can no longer find a $0 down payment situation unless you are eligible for a VA loan. The FHA variety will provide you with an opportunity to put as little as 3.5% down but may require higher APR and points than if you were to put 20% or more down.

The first step is work with a lender and find out your eligibility as a borrower and go from there. I would also suggest saving for awhile longer if you're not ready. You may lose out on some of the deals that are out there right now but you will save in the long run. Also, do not open any credit card accounts, etc as your credit rating will be affected and may look as a negative item on your profile.

If you would like to speak to one of my lenders/advisors, free of charge, I would be happy to pass their information on to you.

Good luck!
1 vote
Oggi Kashi, Agent, San Francisco, CA
Thu Jan 19, 2012
For the most, yes - unless you take advantage of special programs for 1st time home buyers and the BMR (below market rate) opportunities in SF. They even have a downpayment assistance program. Please check with the Mayor's Office of Housing for more info:

There are income limitations and resale price restrictions to consider. Feel free to contact me with any questions. SF property search:


Oggi Kashi
Broker Associate, Paragon Real Estate Group CA DRE 01844627
All data from sources deemed reliable but subject to errors and omissions, and not warranted.
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1 vote
Jamie Comer, Agent, San Francisco, CA
Fri Feb 10, 2012
I am hosting a free seminar for first-time home buyers in San Francisco on February 16th at 6:30pm. Bring your questions and I'll have answers! Details:


0 votes
Stefan Scher…, Agent, San Rafael, CA
Thu Feb 9, 2012
Here's my experience with getting my buyer's (first time or 7th time) ready for a loan:

FHA loans: minimum 3.5% down (You will pay 1.15% PMI Private mortgage insurance) You'll also have a pretty large impound amount due at closing, including a hefty PMI up front premium)

VA: 0% down, no PMI (with several qualifications to be met, one of them is that you're a VET or active duty military)

Conventional: 10% - 20% or more. (anything under 20% you'll pay PMI and have the impound account and upfront PMI premium)

Fannie Mae Home Path funding: 3% Down, no appraisal needed, and NO PMI for the life of the loan. (probably the best deal out there for a non-VET.)

There are other exceptions but they are rare.
0 votes
Robert Spino…, Mortgage Broker Or Lender, Mill Valley, CA
Fri Jan 20, 2012
One of the things that rarely gets discussed when we talk about how little of a down payment can be made is "How big of a mortgage results?" Down payments serve two functions in a purchase/sale. First, they give an indication to the seller about the financial strength of the buyer, and second, they give a buyer a way to lessen the ongoing monthly housing payment. It's important to lot lose sight of either of these in the quest for the other.
0 votes
Sally Rosenm…, Agent, San Francisco, CA
Thu Jan 19, 2012
Looks like your question has been answered. Many of us have First Time Buyer Booklets which would help answer many of your questions. Please let any of us know and we will get one to you. We also have recommendations for lenders as well.

Good luck!

Web Reference:
0 votes
Ildiko Pali, Agent, San Francisco, CA
Thu Jan 19, 2012
Yes, but I know the government program that helps pay for down payment. You can call us 415-923-7628
0 votes
Glenn Groves, , Santa Rosa, CA
Thu Jan 19, 2012
Yes, unless you are a veteran and would like to take advantage of VA financing (0% DP option). Another option is that you can take advantage of FHA financing and put down as little as 3.5% of the purchase price.

My website has all sorts of information on FHA or VA loan options.

Glenn & Elise Groves - Mortage Retrievers!

Seach for homes for free!
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0 votes
Rich Bennett, Agent, San Francisco, CA
Thu Jan 19, 2012
Hi Nichol546-

Yes, there's no way of getting around no downpayment these days. You can expect to be asked to put down 20% if you're looking at a condo or single family home. You may be able to put down less under certain circumstances. I would suggest, as your very first step, is to talk to a mortgage person and get pre-approved. The mortgage person will be able to review your financial situation and let you know what you can afford. If you need some mortgage referrals, I'd be happy to supply you with a few.


Rich Bennett, Realtor in SF since 2002

Zephyr Real Estate
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0 votes
Michael Abram, , Los Angeles, CA
Thu Jan 19, 2012
Hello Nichol546,

The only zero down plan available is a VA loan, if you have enough entitlement. Otherwise, you have to go 3.5% down minimum on an FHA loan, 3% down on a conventional loan with MI (niche product of mine) or 3% down on a homepath approved property. Best of luck to you.

Michael Abram
First Capital Mortgage
NMLS #235060
Direct: (310) 434-1718
Cell: (310) 995-0975
0 votes
Ron Thomas, Agent, Fresno, CA
Thu Jan 19, 2012
The 100% loan programs are VA, for Veterans and USDA for rural property.
You might also Google "san francisco" and "first time buyer" and see what's out there.

Good luck and may God bless
0 votes
Lance King, Agent, San Francisco, CA
Thu Jan 19, 2012
The days of 100% financing are long gone. If you qualify you can get an FHA loan which only requires 3.5% down.

If you'd like some lender referrals our contact info is below.

Best Regards,

Lance King/Owner-Managing Broker
DRE# 01384425
0 votes
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