How to Buy a House with Little to No Down Payment

Light-filled home in Seattle. 2650 sq ft. Master suite upstairs + two bedrooms on main. For more info contact Teri Barry, Keller Williams, 206-632-2636
Light-filled home in Seattle. 2650 sq ft. Master suite upstairs + two bedrooms on main. For more info contact Teri Barry, Keller Williams,

Do you know someone who would love to stop renting and buy their own home? A new study says 79% of Millenials want to buy a house. This study, by Bloomberg, goes on to tell them they can’t save fast enough for a down payment. I am here to tell you that I disagree! Why?

Bloomberg’s chart shows how many years it takes to save 20 percent down.
But who says you have to make a large down payment? It is not required.

Renters, take kitchenheart!

Here are tips for buying a house when you can’t save fast enough for Bloomberg.

  • If your credit score is 720+, take a 3% down conventional loan.
  • If your credit score is 580 – 719, take a 3.5% down FHA loan.
  • If your family is able to give you gift money for a down payment, you’re ready to go.
  • If you are a U.S. Veteran, you may qualify for zero down.
  • Use one of the many down payment assistant programs offered by your state. For example, I have a program in WA that will cover your down payment plus kick in a little for closing costs. You can earn up to $97,000/year to qualify. When you sell the house (or refinance), you pay back the down payment out of the proceeds. This is an interest-free loan to help more people enjoy home ownership.

If home values continue to increase next year as fast (or nearly as fast) as they did in 2015, you are better off buying now than waiting until you can save for a larger down payment.

Also consider that home owners receive the best and biggest tax deduction available. Typically, a home owner can deduct the interest portion of their payment plus property taxes. This lowers their tax bracket, potentially saving significant taxes. (Speak with your CPA for tax advice.)

If credit score is your barrier, then pick up a copy of Repair Your Credit Like the Pros here and get to work. Earlier today, I heard from a lovely young woman in Ohio who followed the book’s directions and is now applying for a home loan. Yes, credit repair works! But you must do it properly, like the credit attorneys and certified credit professionals.

What barrier is keeping you from the American Dream? Post a comment (see top of this article) or send me an email here. I promise to reply.

3 thoughts on “How to Buy a House with Little to No Down Payment

  1. Carolyn, I’ve been following your blog for awhile since reading your book but I believe comming across this post in particular is fate! My fiance and I are in our late 20s and absolutly sick of renting. We want to put down roots (in the Atlanta area) and have been trying desperatly to save for a down payment since paying off our other debt. However, the market seems to be sky rocketing and we can’t save fast enough for the house we want.
    I was so discouraged until reading this post. I’ve been looking for downpayment assitance programs but they seem to be aimed for lower income families. Each of us makes 45-55,000 per year. Do you know of any programs in Georgia that we could look into?

    1. Angie, it looks like each one of you would qualify for the Georgia Dream Homeownership Program. It provides $5,000 toward a down payment. You could each buy your own home, and then after one year, you could marry and rent one home out. In a year’s time, as a couple, you would live in your own home and be a landlord for another. You would have to decide if you’re willing to make that one year sacrifice to get ahead in real estate.

      Another idea is to do the 3% conventional loan. With both of your incomes, that should be possible.

      A third option that does not have any income limit whatsoever is for people who buy in certain areas where the state wants to increase home ownership. You can check out that program and more choices here:

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