Is it still possible to get a house with no money down for first time home buyers?

Asked by Joe, Virginia Wed Aug 20, 2008

I am hoping to buy a house soon in the Lake Ridge/Woodbridge, VA area and have good credit, but not much to put down for a down payment. With the problems in the mortgage industry, I was wondering if they were still allowing these types of loans. I was also wondering about closing costs. Are sellers covering a lot of these now especially with bank owned properties since it's a "buyers market" right now or are they not up for losing any more money on the property?

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Nathan Corye…, Agent, Alexandria, VA
Tue Jul 10, 2012
Joe, you have three Lending Programs that are currently out there that will give you 100% Financing! VA Loan, FHA+ Loan, and also USDA Rural Loan Program they are the 3 Most popular programs! Also I have the Number #1 Ranked Lender in VA & DC with M&T Bank who is an expert at all 3 programs if you Need a Rock-Solid Lender! In reference to closing costs I (OR whatever Buyers Agent you Choose) Can work to get your closing costs paid for you by the Seller on: Traditional Sales, Bank Owned Foreclosure Deals, or New Build, New Construction Deals! Keep in mind though that on New Construction you have to use their lender 99% of the time if you want the Closing Costs paid for you by the Seller! However, whats very Important to know here is that if you are looking at Short-Sales! You can NOT Expect your Closing Costs to be Paid for you no matter what! As a matter of Fact (This is just my Opinion here) I wouldnt even Look at Short-Sales If I were You! That is if you are 100% Financed because, there are Way, Way to many things that can go wrong on your Deal, for it to fall apart! I would only advise looking at Short-Sales if you have cash in the Bank to back you up, on that purchase! If you are 100% Financed I would FOCUS all your attention on ONLY Traditional Sales, REO's, or New Build......That way your setting your self up for Success, not the Opposite!
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Bob Hummer, Agent, WOODBRIDGE, VA
Mon Sep 1, 2008
Most definitely "Yes"! VHDA is Virginia's program for First-Time Homebuyers or someone who has not owned a home in the past three years. Their FHAPlus program is actually 105% financing and includes both the FHA downpayment and some closing cost help. They do have Household income limits- 2 persons or less $86,900 and Households with more than three persons $100,000. Currently, the maximum Loan amount is $408,100. Sufficient for the Woodbridge area. I hope this helps. You are welcome at my monthly Home Buyer Seminars at the Woodbridge campus of Strayer University.
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Tom Campbell, Agent, Warrenton, VA
Sun Aug 24, 2008
Great questions!

Yes, Down Payment Assistance Programs are still available from non-profits funded by churches, employers or family members. However, due to the July 31st American Housing Rescue and Foreclosure Prevention Act, programs funded by those who have a financial interest in the sale are prohibited effective Oct 1, 2008. Lenders, who are currently offering these DAPs, require the contract be submitted to fulfillment centers by Aug 29 and close (go to settlement) by Sept 30. The Down Payment Assistance Programs are definitely going through a transition.

Did you know that the same housing act has provided first-time homebuyers a refundable tax credit of up to $7500?

Details: New Homebuyer Tax Credit - For qualifying home purchases after April 11, 2008 and before July 1, 2009, the Act provides eligible first-time homebuyers a refundable tax credit equal to the lesser of 10% of the purchase price of a principal residence or $7,500 ($3,750 for married individuals filing separately). The credit phases out for individual taxpayers with modified adjusted gross income between $75,000 and $95,000 ($150,000-$170,000 for joint filers) for the year of the purchase. A taxpayer is considered a first-time homebuyer if he (or spouse, if married) had no ownership interest in a principal residence during the 3 year period before the purchase of the home to which the credit applies.
For more information about the Housing Bill go to in Government Affairs section

There are still government backed grants and loans for first time buyers for up to $10,000. If you qualify, some grants do not require you do to pay this money back as long as you live in the house for 4 years.

Great information for first time buyers is available at HUD website: There’s a link to programs in Virginia

CLOSING COSTS are still negotiable and it’s currently not unusual to receive them from sellers whether bank owned or not. We’ve had great success in getting first time buyers seller subsidies in the Lake Ridge/Woodbridge area due to the current buyer’s market and large inventory of homes. Homes prces are currently quite affordable.

This is a great time to be buying a home. If you’re in a position to move forward with purchasing, we recommend checking out your options as soon as possible. If you find out that there’s not a loan product currently available for you, a good lender and realtor will help give you a game plan and help you move towards homeownership, if not this month in a time period that works for your situation. STEP ONE IS TO FIND THE RIGHT LENDER and REALTOR.

Again, thanks for your great questions. Hopefully, you’ve helped other first time buyers move closer to homeownership. Best wishes!
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Scott Godzyk, Agent, Manchester, NH
Wed Aug 20, 2008
Those type of loans have almost all but gone away. However you should contact your local or state housing authority. In conjunction with FHA most offer down payment assistance and/or grants for qualified buyers. Check with a local trusted mortgage company if you are haviong trouble finding your states housing authority. Good luck with your serach.
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