MORTGAGE INSURANCE ALTERNATIVES

There are low down payment alternatives to mortgage insurance (MI). Each has its own benefits and drawbacks. Here are a few of the more widely used options:

Combo or "Piggyback" Loans
Combination loans replace mortgage insurance with a second mortgage for the loan amount over 80%. This second mortgage carries a higher, adjustable interest rate to balance the higher risk created by a high LTV loan. Click the header to learn more about this loan option.

Government Programs
There are several government programs that provide low down-payment options. Two of the most well known are FHA and VA loans.

Private Industry Programs
If you have a very low income and a stable work history, you may qualify for local or national homeownership initiatives. One of the more widely know is Habitat for Humanity. Habitat requires you to invest “sweat equity” by working on the construction of your own home. To learn more about existing programs in your area, contact your local housing authority.