Living in Southern California is the fulfillment of the American dream. The weather is typically amazing, the ocean isn’t far away, and beachy relaxation is only a short drive away.
Unless you’re receiving a substantial gift of cash, however, buying a house in Southern California without any money isn’t possible. At a minimum, you’ll need to have the liquid funds to cover the closing costs of your new home. But if you’re wondering how to buy a house with no money if you don’t have funds saved up for the down payment, then the good news is that yes—it might be possible if you meet certain criteria.
Purchasing a house without putting any money down
One type of these “zero down payment loans” is a physician loan, only available to those who have already earned their specified degrees. Physician loans are available to those who are already in possession of their D.O. or M.D. degrees. Some loan programs are available to those with a D.P.M degree as well. Special programs also apply to orthodontists or dentists with their D.M.D or D.D.S degrees.
The Rural Development section of the United States Department of Agriculture administers another zero-down payment program. While most of the Southern California region isn’t classified as rural and wouldn’t qualify for this program, certain outlying areas would apply. This loan program has income requirements relating to the average median income of the selected location. This program provides options for applying for a direct loan or receiving assistance through a conventional private lender.
The other major zero down payment loan program is intended for United State veterans, active service members, and eligible surviving spouses. This program is also beneficial in that it reduces closing costs for the home as well. Private lenders provide these VA loans, and they are guaranteed by the Veteran’s Agency to provide favorable terms.
Using an FHA loan when you have a low credit score
Determining if a Fannie Mae HomeReady mortgage might work for you
What are the “3 percent down” mortgages?
- The Conventional 97 Loan requires you to either be a first-time homebuyer or one who hasn’t owned a home in three years or more. You’ll need a credit score of 620 or higher to achieve this loan.
- Freddie Mac sponsors the HomeOne program, and it does require you to be a first-time homebuyer. This program limits you to purchasing a one-unit primary residence, so you can’t use it to buy an investment property.
A Freddie Mac Home Possible mortgage is another option
Make sure that you can meet your monthly payment
If you’re looking for how to buy a house with no money, but you don’t exactly fit the requirements for any loan programs above, you might want to consider alternate creative arrangements to finance your purchase. If you know a family member who might have the means to help you, you might want to ask for a family loan. Of course, this option would work effectively with a family member who believes in you and trusts that you’ll repay the loan. If you’re starting out with a high-paid career but don’t have much in the way of savings, a family loan might be a potential option to help you hit the ground running.
Whether you’re borrowing money from the government, a private lender, or a family member, be sure to involve Mint Real Estate in your search for a home. Mint Real Estate covers the entirety of Southern California and would be delighted to help you achieve your dream of homeownership.