Ask the Lender: What are my home loan options if I don’t have a large down payment?

Many people don’t know there are different ways to finance a home. Citizens National Bank (CNB) offers home loan options that could work for many homebuyers.

The most common type of home loan is a Conventional Loan, which lets buyers make a down payment as low as 3%. However, some people think they need to pay more upfront or have higher credit scores than they actually do.

CNB also offers other types of loans that might be a better fit for some buyers or for those who don’t qualify for a Conventional Loan.

These loans are often called Govie loans because they’re backed by the government. The three main programs are:

1. VA Loan (Veterans Administration)

• For active or retired military members with VA eligibility.
• No down payment required.
• No PMI (private mortgage insurance).
• Allows lower credit scores and higher debt levels.
• Often the best option for eligible military personnel.

2. FHA Loan (Federal Housing Administration)

• Requires a down payment of just 3.5%.
• Works well for buyers with lower credit scores or higher debt levels.

3. USDA-RD Loan (U.S. Department of Agriculture – Rural Development)

• No down payment required.
• Has income limits based on household size.
• The home must be in a rural or eligible area.