FIRST TIME HOME BUYER, NO PMI, $0 DOWN

[Harmony12]

I'm preparing to purchase my first home. I am in no way ready (I don't think so anway) but I am preparing myself.

I have a couple of friends that bought houses within the last 2 years. They each have credit scores in the 700s, no PMI, $0 down, low interest rate of around 3.xx% and a conventional mortgate. Something else they have in common is over $100k in student loans. They each had an initial hard time of qualifying because of DTI for student loans. Their auto loans have been paid off for several years. They each said they were told that they qualified for a special program but they don't know any details (name of the program, qualifications other than 700 score etc.) What kind of mortgage program could this be? Also, does anyone know any other details on how to qualify?

[LakeLife]

Sounds like it might be the USDA Home Loan Program:

USDA Home Loan

"The USDA Guarantee loan is a 100% financing mortgage for moderate-to-low income homebuyers in eligible rural and suburban areas. Loans are issued through the USDA Rural Development Guaranteed Housing Loan Program, which was created by the U.S. Department of Agriculture."

Official Site

[blossom_rebuilding]

I believe my 2017 conventional mortgage used a similar loan product; it was a Fannie Mae Home Ready loan. It was presented to me as an option when I was shopping around with my loan officer. The program offered a 3% down payment requirement, with mortgage insurance build into the banks mortgage rate. As such, don't expect the rate the bank offers you to mirror average rates advertised; it will be higher, so you need to do the math and figure out if it is the best product for you. Also, unlike PMI which will drop off after you have a certain amount of equity, you will eventually need to refinance. Lastly, this loan offering has an income ceiling, but my mortgage score at the time was 680, and I had (still have) six figures in student loans. Hope this helps, and good luck!

[JVille]

Ask your friends to give you the name and phone # of their Loan Originator. Get the info direct from the Lender involved.

Please pull your Actual Mortgage FICO scores as the FICO 8 is not a good indication of the work you need to do.

[Harmony12]

RobertJ,

That would be a good option but each home is located within the city limits and outside of USDA guidelines.

[Harmony12]

JVille,

I have my actual mortgage scores and they are updated every month.

Getting contact information is a good idea. Is that invading their privacy though?

[Harmony12]

blossom_rebuilding,

Thank you. This could be an option...I didn't realize that could put the PMI into the banks mortgage rate. Paying PMI for the life of the loan would suck for me big time. Did you decide to just refinance the loan or an early payoff?

[JVille]

You are asking for a referral from friends, co-workers or family. They shared what a great program they got and you are simply asking for contact info to the lender or lenders who offered this great deal.
They told you all about the great program they got right??? If they gave you that much info why wouldn’t they share who they used.
In lending we ask our clients to brag about the great job we did for our borrowers!

[Anonymous]

If you find out the name of the program, please share. I may be able to qualify under this program.