For many Knoxville first time home buyers, one of the biggest struggles of buying a home is coming up with the down payment. Luckily, there are a few different ways for Knoxville first time home buyers to buy a home with absolutely no money down. Here are 3 ways to buy a Knoxville home with no money down.
Rural Development loans allow a Knoxville borrower to buy a home with very little or no money down. The only requirements are that a borrower meet certain income and credit requirements and buy a home in a designated “rural area.” There are many areas in Knoxville that meet the requirements of a “rural area” including: Lenoir City, Powell, parts of Hardin Valley and Karns, Seymour, and Sevierville, among many others. To see the complete Rural Development map, be sure to visit their website here.
The Tennessee Housing Development Agency has a grant program that helps with down payment assistance, in moderate to low income borrowers. While borrowers must meet certain income and credit requirements, there is are no restrictions on the location. THDA grants act as second mortgage on the property. During the time a homeowner lives in the home, there are no payments made on the second mortgage. After 10 years, the mortgage disappears 20% at a time, and disappears altogether after 15 years. If the home is sold prior to 10 years, the borrower is required the pay what is left of the loan off.
Some loan programs allow funds to be gifted from a family member. For first time home buyers with a relative who is able to gift funds, this is a great option to get the loan you want without the down payment. FHA loans and conventional loans are the the down payment to be gifted. If you are thinking about having your down payment to be gifted, be sure to talk with a loan officer. There are certain requirements as to how the funds are documented and it’s much easier to do it right from the start.
Are you interested in buying a Knoxville home for sale? If so, please do not hesitate to let us know. Rick can be contacted at 865-696-9002 or via email at [email protected]. Kati can be contacted at 865-696-1888 or via email at [email protected]. Also, be sure to check out our Knoxville Home Search Page to see what homes are for sale in the area.
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