Di Lewis, Greenwich Connecticut Realtor: Homes, Land, Condos

LOW MONEY DOWN LOANS

Are there low-down-payment home loans?
A host of private lenders offer low-down-payment loans. In addition, there are government programs to help cash-strapped buyers.

The U.S. Department of Housing and Urban Development offers a variety of programs through the Federal Housing Administration that require approximately 4 to 5 percent cash down. Loan limits vary depending on the county where the property is located.

Fannie Mae's Community Home Buyers program allows people to buy with just 3 percent down. For details, contact lenders who offer government-insured loans. In addition to calling lenders for information, contact Fannie Mae directly at (800) 832-2345.

How do some of these low-down programs work?
Most of the private and government low-down loan programs have special requirements. These rules range from requiring borrowers to be first-time home buyers to limits on family income.

In general, cities and counties require that borrowers earn no more than 100 percent to 120 percent of the county's average household income. However, some programs such as the Federal Housing Administration have no income restrictions and do not require the borrower to be a first-time buyer.

Many private low-down loan programs insist borrowers have good credit and also that they obtain private mortgage insurance, which is a small monthly insurance payment that insures the lender against default. Some of the city and county programs are available only in targeted neighborhoods where local leaders are trying to spark reinvestment or increase the homeownership rate.

Resources:
* "Unlocking the Doors to Homeownership," Freddie Mac publication 183; call (800) FREDDIE.

Who do I call for a low-down-payment loan?
Here are several popular programs available to home buyers, along with the appropriate telephone numbers for more information:

* The Federal Housing Administration has programs which require as little as 3 or 4 percent cash down. FHA loans are originated and serviced by private lenders. Check with local lenders to find the best source for your loan.

* Veterans (and reservists) who qualify can buy a home with no money down through the U.S. Department of Veterans Affairs. Call 1-800-827-1000 to find out more.

* Both the VA and FHA offer foreclosure properties for sale, some requiring as little as $100 down. Anyone interested in a VA foreclosure can call 1-800-827-1000 to request a current listing. For FHA-insured properties, call your local U.S. Housing and Urban Development office for more information. Fannie Mae helps buyers who can put down as little as 3 percent of their own money. To see if this can work for you, call 1-800-732-6643.

* Many cities and counties offer special housing loans in order to promote the benefits of home ownership in their communities. To find out what funds may be available to you, inquire at your local housing department.

What is a low down payment?
A low down payment is anything less than the standard 20 percent. Many people borrow with less than 20 percent down by obtaining private mortgage insurance, or PMI. There also are numerous programs to help first-time buyers with little or no down payment, including FHA, VA and Fannie Mae's Community Home Buyers Program.

Should I put more or less down, if we can afford it?
Putting down as little as possible allows buyers to take full advantage of the tax benefits of home ownership, many experts say. Mortgage interest and property taxes are fully deductible from state and federal income taxes. Buyers using a small down payment also have a reserve for making unexpected improvements.

Other real estate experts, however, advise that it is more prudent to make a larger down payment and thereby reduce the amount of debt that must be financed.

Are there alternatives to low-down-payment loans?
There are a variety of alternative financing arrangements such as equity sharing, employer housing assistance, seller-financing and lease options that may reduce the size of the down payment.

Where do I get information on PMI?
Look for tips in "A Mortgage Insurance Guidebook," or "How to Buy a Home with a Low Down Payment," published by the Mortgage Insurance Companies of America, 805 15th St., N.W., Suite 1110, Washington, DC 20005; call (202) 393-5566 to order.

What is Fannie Mae's low-down program?
Fannie Mae is expanding the availability of low-down-payment loans in an effort to help more people nationwide qualify for a mortgage. Two new programs will help potential buyers overcome two of the most common obstacles to home ownership, low savings and a modest income.

To address many first-time buyers' struggles to save the down payment, Fannie Mae developed Fannie 97. The program provides 97 percent financing on a fixed-rate mortgage with either a 25- or 30-year loan term through Fannie Mae's Community Home Buyers Program.

Fannie Mae's new Start-Up Mortgage will assist buyers with a 5 percent down payment who are at any income level. Yet applicants do not need as much income to qualify and less cash for closing than with traditional mortgages. Borrowers will receive a 30-year, fixed-rate mortgage with a first-year monthly payment that is lower than the standard fixed-rate loan. Freddie Mac, Fannie Mae's counterpart, also offers low-down-payment loan programs.

NO DOWN PAYMENT LOANS

Are there no-down payment home loans?
Though some real estate experts advise against it, home buyers interested in buying a house with nothing down can do so. Occasionally, a builder will offer no-down-payment loans to induce sales in an otherwise slow-moving project. Desperate sellers will also promise to finance the down payment to get out from under a property. A veteran can buy a house with nothing down through a VA home loan, as can members of some pension funds.

What about nothing down?
Though some real estate experts advise against it, home buyers interested in buying a house with nothing down can do so. But it's not easy finding these loans and in some cases they can be risky. Occasionally, a builder will offer no-down loans to induce sales in an otherwise slow-moving project. Desperate sellers also may agree to finance the full purchase price to get out from under a property. The Department of Veterans Affairs, or VA, loan program is one program that allows buyers to qualify for a no-down loan.