DECEMBER 11TH, 2018

No Money Down Mortgages

There are a few programs for No Money Down Mortgages. Likely one of the most popular is Fannie Mae’s Flex-100 Home Purchase Loan. This program is unequivocally assistive for consumers that are first-time homebuyers who can afford the monthly payment BUT are unable to afford a down payment. The consumer would not be required to put any monies down with this loan program although they will need to provide $500.00 for the closing costs of the mortgage. A consumer would use a Fannie Mae certified lender to obtain a Flex-100 Mortgage. A great benefit of the Flex-100 mortgage is that it utilizes Fannie Mae’s outstanding automated underwriting system which evaluates the consumer’s application and speeds up the decision-making procedure.

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About No Money Down Mortgages

What Are the Benefits and Options for a Flex-100 Mortgage?
Consumers may utilize this program to make their advent into the American dream of homeownership. Owning a home provides a consumer with a vast amount of financial power and it gets even better after they are able to build equity. To support this program, there are a few payment plans a consumer can consider. Likely one of the most common plans is the option for a Fixed-Rate mortgage (FRM) of fifteen or thirty years. Consumers can also consider an Adjustable-Rate mortgage (ARM). For consumer informational purposes, an ARM will be “fixed” for the first 5, 7, or 10 years – this will be specified per the contract. Once the initial period has passed, the interest rate will change annually.

Are There Any Other Reasons for a Consumer to Select the Flex-100 Mortgage?
Yes! This program does not discriminate between income brackets (higher/lower incomes). A consumer may qualify for the program even if they do have enough money for a down payment! Fannie Mae guidelines allow the consumer to spend their down payment on moving expenses, home repairs, or to simply save it for future mortgage loan payments.

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What About a Vacation Home – Can a Consumer Use the Flex-100 Mortgage for That?
No, it can only be utilized to purchase a consumer’s “primary” residence.

What is the Difference Between the Flex-100 Mortgage and the Flex-97 Mortgage?
Although Flex-97 has similarities of Flex-100, there are differences. Flex-97 requires the consumer to pay three percent (3%) of their home’s purchase price as a down payment.

Are There Any Other Loan Programs That Can Be Used for a No Money Down Mortgage?
• Consumers may wish to investigate “The Zero Down Payment Act” which eliminates the down payment requirement for individuals/families who purchase homes with the Federal Housing Authority (FHA) insured mortgages. The Act creates opportunities for first-time homebuyers who: 1) do not have sufficient savings for down payments; 2) meet FHA’s underwriting requirements; and 3) can afford monthly mortgage payments.

• Another consideration, should the consumer qualify, is a VA-guaranteed home loan which allows veterans/service people with the ability to procure a home loan with favorable terms AND usually without a down payment.

• Additionally, The Rural Housing Service (RHS) guarantees mortgage loans for RURAL residents with no down payment and only minimal closing costs. Rural consumers should check out Section 502 Rural Housing Guaranteed Loan Program to information. RHS was created in 1994 due to the Department of Agriculture Reorganization Act. It was developed to meet community development and housing needs of rural America.

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