A prospective homebuyer in California researches down payment assistance programs on her laptop computer at home.

Saving up with the funds for a down payment can be difficult. Luckily, there are some mortgage down payment assistance options available to California homebuyers that are seeking as little as zero down. In California, the two most popular 0% down loan options are:

  1. USDA rural loan program and
  2. the VA mortgage program for veterans and members of the armed forces.

USDA And VA: No Down Payment Required

  • USDA: The USDA Rural Development loan is available to homebuyers in rural areas who meet specific income requirements. The USDA program provides a 90% government guarantee to approved lenders, allowing them to offer loans for up to 100% of the purchase price. USDA loans are geared toward low- and moderate-income borrowers in eligible rural areas, including select areas within California. It’s a zero-down mortgage option, but unfortunately, it is only available to a small segment of the population
  • VA: The VA loan program offers 100% financing for eligible veterans and members of the military. VA loans offer homebuyers another way to buy a home in California with no down payment. This program rewards veterans and their spouses. Eligible borrowers include those on active duty, veterans, those on reserve, and surviving spouses.

Down Payment Assistance Programs:

One alternative to a 0% down specific loan is a Down Payment Assistance program. The two most common types of financing are Conventional Financing and FHA Financing. FHA loans require at least a 3/5% down payment of the home’s purchase price or its appraised value (whichever is less). Conventional home loans also have down payment requirements, which can range from 3% to 5% on the low end. A buyer can pair one of these loan programs with a grant or down payment assistance program to achieve 0% down, however Conventional and FHA Financing structures by themselves do not have any no down payment options.

Using Gift Funds To Minimize Your Expense

Another alternative to a zero-down mortgage is gift funds from a family member or other approved donor. Many mortgage programs, including FHA and Conventional loans, allow for gift funds from a family member. While it is not truly a 0% down payment option, it is a strategy to reduce the number of funds that come out of the homebuyer’s pocket.

To learn more about mortgage financing with down payment assistance, or how you can get pre-approved for a 0% down payment loan program, and the other factors that impact your home loan process, you can contact our expert team of Mortgage Analysts. Our team is available 7 days week by phone at (855) 855-4491 or by email at [email protected].

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