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Low Down Payment Loans

Low Down Payment Loans

Lower-income, creditworthy borrowers can achieve the dream of homeownership.

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While we always recommend saving up for a home and making a down payment of 20%, Texell can help if you don't have a large down payment with a HomeReady® loan, tailored to your needs.

Benefits of HomeReady Include:

  • Low down payment: As low as 3% down for home purchase or refinance loans
  • Down payment & closing cost assistance: Funding can come from gifts and grants, with no minimum fund requirement from the buyer
  • Affordable mortgage insurance (MI): Reduced MI coverage requirement above 90% loan-to-value

HomeReady Buyers Include:

  • First-time or repeat homebuyers with lower income
  • Anyone with a credit score of at least 620, but scores higher than 680 may get better pricing
  • Supplemental boarders or rental income
  • Those seeking a purchase or refinance

First-Time Homebuyer Programs
Our First-time Homebuyer Loans offers lower monthly payments with no mortgage insurance¹ and down payments as little as 3%.² Gift funds are also accepted for down payment or closing costs.³ Eligibility is based on specific requirements, such as income limits and how long you will live in your home. 

If you don’t qualify for the HomeReady® Mortgage or first-time buyer programs, you may be eligible for a "low down payment" government loan.

Frequently Asked Questions:

A fixed-rate mortgage is a type of mortgage that has a fixed interest rate that does not fluctuate with market rates. Typically, fixed-rate mortgages refer to a “30-year fixed” loan, where the interest rate and payment will remain the same for 30 years.

An adjustable-rate mortgage is a type of mortgage in which the interest rate applied on the outstanding balance varies throughout the life of the loan. Typically, the initial interest rate is fixed for a period of time, after which it resets periodically, often every year.

The interest rate is the amount you will pay every year on your mortgage loan expressed at a percentage rate. The Annual Percentage Rate (APR) includes the interest plus any other charges, fees, or points associated with your loan. The interest rate does not include any additional fees associated with your loan. For this reason, the APR is usually higher than the interest rate.

Private Mortgage Insurance (PMI) is generally required when you have a conventional mortgage loan and your down payment is less than 20%. If you refinance and your home’s equity is less than 20%, PMI is generally required. This insurance policy protects the lender if you stop making your mortgage payments and adds additional costs to the monthly mortgage payment. PMI is not a permanent cost, and may be removed when you have at least 20% equity in your home or the property financed.

A Federal Housing Administration (FHA) Loan is a government-backed mortgage insured by Housing and Urban Development (HUD) that has historically been for borrowers seeking minimal down payment or who fall below standard lending guidelines. Today, FHA loans have emerged as the main source of financing for low down payments and/or lower credit score purchases and refinances, and provide excellent financing for most homeowners. FHA loan guidelines have recently changed to reflect higher home values in areas where FHA loan limits were previously too low to help the average household.

A VA loan is a loan guaranteed by the Department of Veterans Administration for qualified veterans and active-duty military personnel and their spouses who are first- or second-time home buyers.

A USDA loan is a loan guaranteed by the United States Department of Agriculture (USDA). They are particularly favorable to those living in rural or low-income areas. They offer $0 money down, lenient eligibility requirements, and competitive interest rates. Homes must be located in eligible areas to qualify for a USDA loan.

Rates are subject to change without notice and may vary depending upon credit history, loan programs, and loan terms. Rates are quoted on a 30-day lock option. For additional rates or program availability, please contact the Mortgage Department at 254.774.5104 or apply online.

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