Zero-Down Mortgage Options for Washington State Home Buyers

March 28, 2017
Last updated:
April 4, 2022
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Coming up with a down payment can be difficult. Luckily, there are mortgage options available to Washington homebuyers that require as little as zero down.

Home buyers in Washington State seeking zero-down mortgage options may find they have limited choices. Most mortgage programs require an upfront investment from the borrower in the form of a down payment.

However, there are a couple of special programs out there specifically designed to help, and the VA home loan is one of them. Here’s what you should know about zero-down mortgage loans in Washington State.

What Is a Zero-Down Mortgage Loan?

A zero-down home mortgage can cover 100% of the purchase price. This means the buyer can come to the closing table without a down payment of any kind. The entire purchase can be financed.

Zero-down mortgages are rare in Washington State, with a couple of notable exceptions. That’s because most home loan programs require a down payment investment from the buyer.

For example:

  • The FHA loan program requires a down payment of at least 3.5% of the purchase price or the appraised value, whichever is less.
  • Conventional home loans also require a down payment of some kind, which can range from 3% to 5% on the lo end.

However, there are a couple of mortgage financing programs available in Washington State that allow for zero down payment. Two popular options are the USDA rural loan program, and the VA mortgage program for veterans and members of the armed forces.

USDA and VA: No Down Payment Required

There are still ways to buy a home in Washington State with a zero-down mortgage. The USDA Rural Development loan program is available to borrowers in rural areas who meet certain income criteria. The VA loan program offers 100% financing for eligible veterans and members of the military.

Here’s an overview of each program:

  • USDA: This program provides a 90% government guarantee to approved lenders, which enables them to offer home loans up to 100% of the purchase price. It’s geared toward low- and moderate-income borrowers in eligible rural areas, including select areas within Washington State. It’s a zero-down mortgage option, but unfortunately its only available to a small segment of buyers.
  • VA: The VA loan program is another way to buy a home in Washington with no down payment. We are particularly passionate about this program, because it rewards our brave men and women in uniform. Eligible borrowers can qualify for a VA loan up to 100% of the purchase price, eliminating the need for a down payment. Here are the basic eligibility requirements.

One of the great things about VA loans right now is that loan limits have been eliminated for 2020. Before the start of the year, borrowers must stay under a certain loan limit in order to take advantage of the zero-down payment option. But now, borrowers can still benefit from no money down, regardless of the price of the home. (The exception is for those who already have more than one VA loan or have defaulted on one in the past).

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Using Gift Money to Minimize Your Expense

One alternative to a zero-down mortgage is gift money from a family member or other approved donor. This is known as a down payment gift. These days, many mortgage programs allow for gift money from approved third-party donors. This applies to both FHA and conventional home loans. Learn more about using gifts.

It’s not truly a zero-down mortgage option, because the upfront investment is still required. However, with this strategy, the down payment doesn’t come out of your pocket. Gifting can reduce, or even eliminate the up front, out-of-pocket expense of buying a home in Washington State.

In addition to these zero-down mortgage options for Washington home buyers, there are certain types of home loans that offer a low down payment. We’ve covered some of the most popular options here.

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Need a Home Loan?

Will you be buying a home in Washington sometime soon? Do you need mortgage financing to make it happen? We can help. Sammamish Mortgage has been helping borrowers across the state since 1992. We offer a variety of mortgage programs for homebuyers in Washington, Oregon, Colorado, and Idaho. Please contact us if you have questions about getting a home loan, or if you’d like to receive a rate quote.

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