0% Down. Check it out!

[pianoman9701]

For first-time homebuyers (at least one buyer who hasn't owned a home within the last three years), I have a lender offering a 3% down payment incentive, up to $15,000 ($500K purchase). It's in the form of a second loan, interest-free, on a 30-year fixed rate mortgage. This is most beneficial to borrowers with a credit score of at least 700 (no income limitations), but can work as low as 620 for low income borrowers (80% or less that average median income for that county). Upon sale of the home or refi, you do have to pay it back. But it's interest free regardless of when that happens. And the second has no effect on your debt-to-income ratio. Please call or PM me for more info.

[pianoman9701]

Keep in mind that with seller concessions, it would be possible to purchase a home with little or nothing out of pocket.

[Rainier10]

This seems like a great deal for first time home buyers.

[pianoman9701]

It is, especially for those with good credit. For lower credit borrowers, the amount of monthly mortgage insurance is high.

[trophyhunt]

What about the first time buyers that have a piece of land and need a construction loan?

[highside74]

What about the first time buyers that have a piece of land and need a construction loan?

If you own the land or it has equity, that would be considered from the construction loan bank technically as down payment. We had to provide the deed to our property when we did the construction loan. A bank isn't going to loan for a house build without having the deed to the land. They used the value of the land in the loan to value equation. We had zero down. They also would have let us put the improvements made before the construction loan into the construction loan if we wanted the money back. Like water, power etc. We didn't do that but it was offered.

[pianoman9701]

What about the first time buyers that have a piece of land and need a construction loan?

If you own the land or it has equity, that would be considered from the construction loan bank technically as down payment. We had to provide the deed to our property when we did the construction loan. A bank isn't going to loan for a house build without having the deed to the land. They used the value of the land in the loan to value equation. We had zero down. They also would have let us put the improvements made before the construction loan into the construction loan if we wanted the money back. Like water, power etc. We didn't do that but it was offered.

  Owning land outright, the land value counts as equity toward a construction loan, or the amount of equity that has been accumulated if you still have a note. So you wouldn't need the 0% down option.

This 0% Down program doesn't include a construction loan. FHA does construction loans, but you need 3.5% down PLUS an upfront mortgage insurance premium (UFMIP) of 1.75%. Our brokerage is currently applying to be able to do down payment assistance in WA. WA is one of two states that controls this program instead of the lender, which complicates the process and requires an additional government staff.

The best 0% down construction loan is VA. We've done several of them. The last closed in 36 days, which is super-fast for a construction loan. Veterans and active duty usually qualify, depending on your discharge status.

[trophyhunt]

We gave the land my daughter and son in law, it’s owned free and clear to them.  It’s worth minimum 150k, 1.25 acres with power, water (well) and septic approval.  They think they need a bunch for a down payment on a construction loan.  My best friend will be the general but he’s not a licensed contractor, they think the banks won’t loan money unless he’s licensed?

[highside74]

We gave the land my daughter and son in law, it’s owned free and clear to them.  It’s worth minimum 150k, 1.25 acres with power, water (well) and septic approval.  They think they need a bunch for a down payment on a construction loan.  My best friend will be the general but he’s not a licensed contractor, they think the banks won’t loan money unless he’s licensed?

I'll pm you.

[pianoman9701]

We gave the land my daughter and son in law, it’s owned free and clear to them.  It’s worth minimum 150k, 1.25 acres with power, water (well) and septic approval.  They think they need a bunch for a down payment on a construction loan.  My best friend will be the general but he’s not a licensed contractor, they think the banks won’t loan money unless he’s licensed?

Regardless of which construction loan you do, the contractor must be licensed and unrelated by blood or employment to the land owner. The must've have also completed at least three similar projects under their license.

[highside74]

We gave the land my daughter and son in law, it’s owned free and clear to them.  It’s worth minimum 150k, 1.25 acres with power, water (well) and septic approval.  They think they need a bunch for a down payment on a construction loan.  My best friend will be the general but he’s not a licensed contractor, they think the banks won’t loan money unless he’s licensed?

Regardless of which construction loan you do, the contractor must be licensed and unrelated by blood or employment to the land owner. The must've have also completed at least three similar projects under their license.

Not through who we used.

[pianoman9701]

  Which lender did the loan, if you don't mind me asking? And which type of loan was it - FHA, VA, conventional, Non-QM?

[highside74]

Which lender did the loan, if you don't mind me asking? And which type of loan was it - FHA, VA, conventional, Non-QM?

Washington Federal conventional

[pianoman9701]

That's awesome. I'm glad you got it done.

[highside74]

I didn't want to post Wa fed on your thread. I know this is your profession and I wanted to respect that.

[pianoman9701]

I didn't want to post Wa fed on your thread. I know this is your profession and I wanted to respect that.

I appreciate that. The post is about another topic but I asked you. 

Now, back to $0 down! The normal 3% down payment isn't a gift. It's deferred until that mortgage is closed, either by sale, refi, etc, and will be paid off at the end. But there's no interest, no payments, and it doesn't affect DTI. The maximum limit is $15,000.

Remember that if you're an honorably-discharged veteran or active duty, you can get a mortgage with 0% down, but also no PMI, which saves you hundreds of dollars a month. In addition, VA mortgages are normally a lover interest rate than conventional.

[highside74]

I didn't want to post Wa fed on your thread. I know this is your profession and I wanted to respect that.

I appreciate that. The post is about another topic but I asked you. 

Now, back to $0 down! The normal 3% down payment isn't a gift. It's deferred until that mortgage is closed, either by sale, refi, etc, and will be paid off at the end. But there's no interest, no payments, and it doesn't affect DTI. The maximum limit is $15,000.

Remember that if you're an honorably-discharged veteran or active duty, you can get a mortgage with 0% down, but also no PMI, which saves you hundreds of dollars a month. In addition, VA mortgages are normally a lover interest rate than conventional.

If you combined this offer with a builder that is offering to help buy down the Interest rate the buyer could be in a great position they weren't expecting.

[pianoman9701]

I didn't want to post Wa fed on your thread. I know this is your profession and I wanted to respect that.

I appreciate that. The post is about another topic but I asked you. 

Now, back to $0 down! The normal 3% down payment isn't a gift. It's deferred until that mortgage is closed, either by sale, refi, etc, and will be paid off at the end. But there's no interest, no payments, and it doesn't affect DTI. The maximum limit is $15,000.

Remember that if you're an honorably-discharged veteran or active duty, you can get a mortgage with 0% down, but also no PMI, which saves you hundreds of dollars a month. In addition, VA mortgages are normally a lover interest rate than conventional.

If you combined this offer with a builder that is offering to help buy down the Interest rate the buyer could be in a great position they weren't expecting.

I agree. That's a great idea. Builders usually have deals with lenders to give them business. Somehow, they get around illegal referral fee laws and the end result is often an increased rate.

[bustedoldman]

Will this work for a multi family residence (Duplex)?

[pianoman9701]

Sorry, no - single unit only.