Down payment plays a significant role when you take out a mortgage. A down payment can be defined as a portion of the purchase price of the real estate that you need to pay upfront to your mortgage lender. You may have to pay high interest rates or purchase a PMI (Private Mortgage Insurance) if you’re not able to make at least 20% down payment on a home. Moreover, as a result of the economic downturn, it has become quite difficult to qualify for a mortgage without any down payment. However, if you can’t afford to make the down payment, you can take assistance from diff organizations.

• Down Payment Assistance Programs

There are several DAPS (Down Payment Assistance Programs) that help the first-time homebuyers to take out an FHA mortgage in order to own a real estate. These programs assist the buyers with the closing costs and the required down payment. Some of these loan programs are discussed below.

• Nehemiah Down Payment Assistance Program

Nehemiah is a privately owned non-profit housing corporation of California. Nehemiah gifts up to 3% of the final home sale price to a qualified buyer so that he/she can purchase a Nehemiah property anywhere in USA. Moreover, with the help of this program, a Nehemiah buyer can purchase a property without any down payment when it is combined with an FHA home loan.

• Neighborhood Gold Down Payment Assistance Program

Unlike Nehemiah, the Neighborhood Gold Down Payment Assistance Program helps any homebuyer (not only limited to first-time homebuyers) as long as he/she qualifies for an FHA home loan. However, both the seller and the buyer need to participate in order to take help of this program. Depending on the amount of the seller’s participation, a qualified buyer may get 3-10% towards the closing costs and the down payment.

• Government loans with no down payment

Have a look at the following lines to know where you can seek assistance for down payment so that you can qualify for a mortgage.

• VA loans

If you are an US military veteran, then you can take help of VA loans to purchase a real estate without making any down payment. If the loan amount is within the limit, then the federal government will guarantee the loan. However, you’ll have to pay a fee for it; the fee depends upon the required down payment amount and whether or not you’ve served full-time in the military (in reserves or in National Guard).

• USDA home loans

You can take out a USDA (United States Department of Agriculture) mortgage if you’re buying a property outside the major metropolitan areas of USA. This loan helps you to buy a home with a zero down payment. However, you need to satisfy the eligibility criteria to take out these loans.

Apart from taking help of the above programs, you can also obtain a mortgage loan from a credit union if you’re a member of it. You may have to make a comparatively low down payment on your home if you take out a home loan from a credit union.

You can also take out an 80-10-10 loan to buy a real estate. In this type of home loan, you need to make only 10% down payment and get 2 mortgage loans – one financing the 80% of the purchase price and the other financing the remaining 10%. It also helps you to buy a loan without purchasing any Private Mortgage Insurance policy. However, it is advisable that you accumulate the required amount to make 20% down payment while purchasing a property.