Zero Interest Home Loans for First Time Buyers

There are a number of home loan schemes that are sponsored by the government that allow you to take advantage of low down payment schemes. You can even opt for a scheme that gives you down payment assistance. If you are eligible for one of these schemes, you can truly get a home loan at zero down payments.

Just to give you the flavor of such a scheme, the DuPage Homeownership Center offers a program where a prospective owner puts up 3% of the cost of the house from his own resources (not a gift or a loan), he then needs to qualify for a regular home loan from a home loan agency. This has to be on the borrowers own merit and he must qualify for a loan like everybody else. From the participating loan agency, the buyer borrows 55% of the cost of the home. Then, and here is the good news, he gets 40% of the cost in the form of a zero interest second mortgage from the Illinois Housing Development Authority and the Federal Home Loan Bank.

The second mortgage is at zero interest and can be for up to 30 years. This makes it really easy for a person to acquire a home and save tens of thousands of dollars in the process.

The good news does not end here, the buyer is also given a grant of $2500 towards closing costs. If the buyer stays in the house for five years, this is also waived off.

There is more to follow! Participating lenders waive off document and other fees, saving you around $400 and other incidental expenditure is reduced by around $100. As the man said to his friend, a dollar here and a dollar there and soon we are talking real money!

The key to the entire process is good credit. If you are a first time home buyer and have good credit, then you may be in luck. In addition to this, there are no median income restrictions and there are no first time homebuyer education requirements that need to be met. The example I gave above was just one of the dozens of such programs.

People buying homes in rural areas can avail of special incentives! You can avail of a rural housing service loan that can help you to acquire a home in areas that would otherwise not be approved. In fact, you can get 100% of the LTV based on the appraised value of your home. You can even opt for pre-fabricated (manufactured) housing under this scheme! There is no down payment and you do not have to show any cash reserves at all! This makes this a great option for a first time home buyer.

There is no dearth of schemes for a person who has a burning desire to own his/her own home. User-friendly schemes and hundreds of options ensure that there is something that is just right for you.