For someone who is thinking of buying a first home, the idea of saving enough money for a down payment can be daunting. The good news is a first-time buyer can purchase a home for a little as 3 percent down -- and even no money down in some cases.

Even with no down payment, home buyers still need some cash to cover closing costs and upfront costs, such as a year's worth of taxes and insurance. However, some loan programs allow buyers to use a contribution from the seller or a gift from family to cover closing costs and down payments.

Here are four types of loans you can get with a low down payment, which may be especially appealing to first-time buyers.

Federal Housing Administration (FHA). FHA loans are offered with down payments as low as 3.5 percent. These loans accept buyers with lower credit scores. Buyers need to pay an upfront mortgage insurance premium as well as a monthly insurance payment.

Conventional Mortgage. Fannie Mae and Freddie Mac will back loans with down payments as low as 3 percent. These loans are cheaper than FHA loans, but you will need solid credit to get them. The more you put down, the less Private Mortgage Insurance you’ll have to pay.

U.S. Department of Veterans Affairs (VA). If you served in the military, you can get a VA loan with zero down payment. You still have to qualify for the loan based on income and credit, but this is a great program if you qualify.

U.S. Department of Agriculture (USDA). The USDA guarantees loans with nothing down in rural and suburban areas to those who meet income and other qualifications.

Down Payment Assistance. If you need help with the down payment, these programs act as a silent second mortgage, with no payments due until the home is sold or refinanced. Other programs offer grants or forgive the loan once you live in the home for a certain amount of time. The programs are typically for first-time buyers, or anyone who hasn’t owned a home in the last 3 years. For more information, check out our article on First-Time Homebuyers – San Diego Down Payment Assistance. 

If you need assistance with any of these programs, give us a call today and we’ll help you make the right move!