1. FHA (Federal Housing Administration) very common type of loan – typically 3.5% down payment required. Generally easier on the buyer and little tougher on the home (i.e., peeling paint, missing handrails, etc. can cause problems).
2. Conventional Mortgage typically 5% minimum down payment required. Slightly tougher on a marginal buyer but easier on the house. Rule of thumb for the house is “safe, sound and sanitary.”
3. DVA (Department of Veterans Affairs) similar to FHA in some ways. May have as low as 0% down. Must be a veteran to qualify.
4. Seller Financing (“CD” or “Rent to Own”). Seller financing means just that – the seller provides for the financing rather than a mortgage lender. The good news is that a buyer does not need to formally qualify for the lien through a banking institution. The bad news is that down payments and interest rates, while negotiable, are typically higher in these situations, and the length of these contracts are typically much shorter than bank-approved 30 years loans. While relatively rare, there are situations where one of these is a good option for a buyer and where one of these options makes sense for a seller. If you wish to pursue seller financing, make sure your agent understands what is involved (most real estate agents in this area have never written an offer involving seller financing), and feel free to contact one of our agents; (we are trained and experienced in these types of financing) and discuss the advantages and disadvantages of these options. We can’t give you legal advice, but we can outline what is involved in seller financing.
5. Other – 1st Time Home Buyer’s, AEOA Home Buyer Assistance, Rural Development Loans, etc. These are great programs if you qualify. You need to ask your lender about them.