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No down payment? These programs can help!

By: Mitch Mitchell
May 24, 2023

Owning a home is a pretty major goal for lots of Americans, but the thought of buying a piece of property — whether it's a condo in the sky, a suburban house or a fixer-upper in the countryside — can be intimidating, especially if you're a first-timer. 

You're probably worried about saving up for a down payment and closing costs, finding an interest rate that won't break the bank and making sure you have enough cash for a few new pieces of furniture after you move in. 

But the great news is that there are programs to help first-time buyers — or even those buying a second home — overcome these challenges and make their dream of owning a new place a reality! 


Down payment and closing cost assistance

Saving up for both a down payment and estimated closing costs can be a real challenge — and it's one of the biggest obstacles to becoming a homeowner. These upfront costs can add up quickly and put owning a home somewhat out of reach for Americans who might otherwise be able to afford their monthly mortgage payments. 

But what if the obstacle you're facing is the type of loan you're considering? 

If you're struggling to come up with the cash you need to buy a home, don't give up hope: the following loans might put home ownership right within your reach!


The Federal Housing Administration (FHA) loan program is a government initiative that helps low- and moderate-income Americans buy homes. With an FHA loan, qualified borrowers only need a down payment of 3.5%, which is much less than the 20% most people think they need to save to even consider buying a home. You can even get help from your family or other sources with gift funds to cover the entire down payment and closing costs. 

Other great benefits of FHA loans are that they're more flexible with a buyer's credit score, and the seller can pitch in up to 6% of the home's purchase price to help pay for closing and prepaid costs.


No down payment? These programs can help!


Need a down payment boost for that FHA loan?

  • Movement has just launched a new program called Movement Boost, a down payment assistance program designed to help approved buyers cover their down payment for an FHA loan. This program is great for people struggling to afford all the costs of buying and moving into a new home. 
  • Movement Boost is available nationwide (with the exception of NY) and provides the full 3.5% payment required to secure an FHA loan. If you meet the criteria for the 5% Movement Boost, you'll receive full coverage for your 3.5% down payment, with the remaining 1.5% allocated towards closing costs. Keep in mind, you will be responsible for any remaining closing costs past what the 1.5% covers. The amount will be provided through a repayable second lien that will amortize in 10 years, at an interest rate set at 2% above the rate of the first lien. 
  • Brand new this year, Movement Boost is perfect for first-time buyers who don't have enough savings, but it's also open to repeat buyers.


Backed by the United States Department of Agriculture, the USDA loan is another option for potential borrowers. It's designed for low-to-moderate-income individuals who want to purchase a home in a designated "rural" area — and you'd be surprised at how many suburban areas and small towns are included!  

One of the benefits of the USDA loan is that it offers eligible applicants the opportunity to buy a home without a down payment. It also allows for the seller to contribute to your closing costs.


A VA Loan is a mortgage guaranteed by the U.S. Department of Veterans Affairs (VA) that's popular among eligible veterans, service members and their surviving spouses who want to purchase a home. 

One significant benefit of a VA loan is that it usually requires no down payment, enabling eligible borrowers to buy with little or no upfront payment. Making a down payment of at least 5% may lower your funding fee, which goes to the VA to help support the program. 

VA loans also don't require mortgage insurance, which is usually required for mortgages when there's less than 20% put down. And they usually have lower closing costs and more flexible credit and income requirements.


The most popular way to finance a home is with a conventional loan, and it has great benefits for eligible borrowers. Unlike FHA and other government-backed loans, conventional loans can be used on almost any type of property with fewer property restrictions. 

Conventional loans have a variety of down payment options available, and borrowers who make higher down payments can enjoy even more advantages, like, if you can put down 20% or more, you may be able to eliminate the need for Private Mortgage Insurance (PMI). 

If you're short on funds for a down payment, we offer a variety of conventional low down payment options to help you get started, including: 

  • Fannie Mae HomeReady 
    • The HomeReady program, provided by Fannie Mae, is an affordable housing initiative that offers fixed-rate mortgages to creditworthy individuals with low-to-moderate incomes. If you're qualified, you can secure up to 97% financing, making it easier to purchase a home with as little as a 3% down payment. 
    • Another unique feature of the Fannie Mae HomeReady program is that it considers non-traditional sources of income for qualifying purposes, including income from family members.
  • Freddie Mac Home Possible
    • Similar to Fannie Mae's HomeReady program, Freddie Mac offers the Home Possible and Home Possible Advantage home loan programs. With Home Possible, homebuyers can finance up to 97% of the home's value, so again, just a 3% downpayment. And co-borrowers can help qualify for the loan. 
    • Home Possible is designed for people with modest incomes and those purchasing or refinancing properties in specified areas.


Thumbs up for a lower down payment!

Getting your down payment in order is an important step toward buying your dream home! To make the process stress-free, it's essential to get your finances in tip-top shape well before you start shopping. 

So, if you're in the market for a new home but have questions about home financing, please reach out to one of our local loan officers to discuss how much down payment you'll need or what potential closing costs might be.

black and white photo of Mitch Mitchell
Author: Mitch Mitchell

Mitch Mitchell is a freelance contributor to Movement's marketing department. He also writes about tech, online security, the digital education community, travel, and living with dogs. He’d like to live somewhere warm.