Mortgage Help   Mortgage Rates Real Estate Credit Foreclosure Tax Mortgage Rates Mortgage Basics Chapter 1: How much house can you afford? Homeownership Should You Buy or Rent Summary   Chapter 2: Adjustable-rate mortgages ARM and a fixed-rate mortgage Fixed-rate mortgages Understanding the key elements Which type of lender is right for you? Other types of mortgages Subprime Summary   Chapter 3: Your credit score Down Payment How lenders set rates Low down payments Mortgage insurance Your mortgage payment Mortgage Points Summary   Chapter 4: The good faith estimate Inspection and Insurance Necessary paperwork for a buyer Other lender paperwork Paperwork and fees Prequalification and preapproval Special circumstances Summary   Chapter 5: Ten questions to ask Turned down for a mortgage Underwriting What lenders ask Summary   Chapter 6:  Understanding the closing process Escrow Summary   Chapter 7: When your mortgage is sold Avoiding foreclosure Paying ahead Payment changes Refinancing Removing mortgage insurance Summary Low down payments There are a variety of special loan programs out there that allow small down payments of other benefits. Many programs are designed for first-time home buyers, while others focus on borrowers with low incomes. If you need help buying a home, you should ask your local bank or lending institution if they offer any special mortgage programs. State housing agencies, HUD offices and Consumer Credit Counseling Services can help refer you to lenders that will assist you. There are a few programs that are fairly popular: Department of Veterans Affairs (VA) mortgages VA mortgages are backed, not issued, by the government. This mortgage programs helps veterans and their spouses purchase homes. No down payment is usually required and there are other benefits that help the buyer. Federal Housing Administration (FHA) mortgages Many first-time home buyers turn to FHA loans. These mortgages are backed by the U.S. government and administered by the Department of Housing and Urban Development (HUD). They feature easier credit qualifications, lower down payments and favorable underwriting standards. HUD ensures the lenders full payment if the borrower defaults. This reduces the risk to the lender. Rural Housing Service mortgages The Department of Agriculture helps farmers and other qualified borrowers with low t o moderate incomes in buying property in rural areas or small towns. The borrower must be unable to obtain a mortgage elsewhere. The mortgage is usually low-interest and has no down payment. State and local government-backed mortgages Many state and local housing agencies sponsor mortgage programs designed to help first-time home buyers purchase homes. The buyer must meet specific income guidelines or be willing to buy in a specific area. The mortgages usually have low down payment requirements, subsidized interest rates and help with closing costs. Down payment assistance programs The FHA requires buyers to make down payments of at least 3%, but allows nonprofit agencies to bestow gifts of down-payment funds to buyers. There are nonprofit agencies that do just that - they help the buyer come up with a down payment. The seller usually agrees to donate a certain amount of money to the down payment assistance program. The amount is usually equal to around a 3% down payment. At closing, the program gives the money to the seller. The seller gives the program a contribution equal to the down payment plus a processing fee after the closing. This allows the seller to pay the down payment for the buyer, which goes around the FHA requirements of where the payment must come from.