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Is there any way to get very low cost funding to buy a First Time Buyer Home that is minimum 1200 sq. ft. house with Finished Basement, 2-3 BR, 1+1/2 Baths and with only $5,000 Cash saved up (but I'd like to keep $1,000 of that $5,000, if possible) to apply towards my Down Payment & inspection, title search, any other up front costs? Any clever short term ways to do this? I want to get out of this 30 years of trailer park living and buy my own house!

Elizabeth A

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I think it's entirely possible to buy a home with $4000 down, but you might not be able to have every single one of your requirements met. If you have the income to support a large monthly mortgage payment, then you have more options but a 1200 square foot home with a finished basement and no extra costs for inspections (not a good idea to skip this) is going to be a stretch. Some areas of the country are less costly than others, but you don't say anything about your income and what level of monthly payment your income can support.
You might benefit from talking to a few lenders to see what they say (and remember, lenders want to lend you as much as possible because lending institutions make money on your payments and interest payments). That will give you an idea of what your housing budget will be. It's better to start with the reality of what you can look for than to set your heart on your dream home on your budget. We can all dream, but in reality you need to find out what's realistic or you'll just be forever chasing an impossible dream.

Another avenue to explore once you find out what your monthly budget can support might be to contact Habitat for Humanity. I believe they are mostly focused on families with children and you don't say whether you are in that situation or not. They also require hours of "sweat equity" where you help in the building of your own house. Having a requirement for the size of house you want and parameters like a finished basement on a budget is going to narrow your choices down quite a bit.
Once you talk with lenders to get a general idea of what they could lend you on a home, explore on Zillow or to get a ballpark idea of what is available within your budget. You don't say if you're also wanting to live in a specific state or area, so the more flexibility you can have, the more options you can find. There are some areas of the country where 1200 sq ft houses with finished basements are more affordable than others, so the more open you are on looking outside your exact specifications, the more options you might find.
If your monthly budget is very limited in addition to your down payment, explore what opportunities there might be for first time buyers. There is not just the down payment to consider; once you purchase a house, you also have monthly mortgage payments, insurance, taxes and repairs and upkeep to budget for, too. Knowing those things up front can help you be realistic about your search. It might take you doing some research, talking to social service agencies or even possibly realtors, for referrals. Another suggestion I would make is to not max out your budget to where all your money is going to your house. There will always be unexpected things that happen in life where you're going to need to have enough money to take care of something you couldn't anticipate. Lenders like to make you think you can afford "bigger and better" but you have to know what you can comfortably afford and stick with it or you could not only end up being unhappy but if you had a real financial emergency somewhere down the road, you could end up putting your housing in jeopardy. If I had maxed out when I got my house, when I lost the job I had I could have ended up losing my house by not being able to keep up with the payments on my new, unexpectedly much smaller income.
I purchased my house with a small down payment by changing my expectations about what I could afford and what area I wanted to live in. When I saw what was available within my budget in the area I wanted would require a lot more fixing up than I was able or financially prepared to do, I realized that my original expectations would be very hard (like, impossible) to meet on my budget. Once I changed my expectations I was able to see other options and found I had a range of affordable, realistic choices in a different area than where I stared my search and I've been very satisfied with the house I picked out from several in a different area from my original ideas for the past 10 years.

Do your research, lay the groundwork and enjoy your search.

Huge caveat - this is fully dependent upon your salary and location. That said, you might want to look into a direct USDA loan. You need to be listed as low or very low income for your area (in mine, it's under $80K) and be in a "rural" area (which is the majority of the US). You can also avoid the PMI this route. Their loan officers/house buying advisors are amazing--incredibly helpful and supportive throughout the process. Good luck!!

Hello!  And the answer is YES!  As a full time realtor, I recommend you start the conversation with a local agent.  There are loan products available and grants for first time buyers.  You can also check out my 1st time buyer tab and the others at  I just closed a buyer this morning who purchased a 3 bedroom home for $120,000 and only had to bring less than $4,000 to closing.  Interest rates are still really great. 

First time home buyer programs are usually pretty unadvertised but state and federal programs can be found on your local housing authority website. We bought our first home 4 years ago through a Wells Fargo promotion that said they'd pay up to $15,000 towards the down payment on a house as long as we agreed to physically live in it for at least 5 years. (i.e not for flippers) And then we used the HERO program to upgrade the AC. HUD housing auctions got my mother a house for $100 even though she didn't have the highest bid, she had good credit so it may take some due diligence researching first time buyer programs in your area, but it's well worth the time

Huge caveat - this is fully dependent upon your salary and location. That said, you might want to look into a direct USDA loan. You need to be listed as low or very low income for your area (in mine, it's under $80K) and be in a "rural" area (which is the majority of the US). You can also avoid the PMI this route. Their loan officers/house buying advisors are amazing--incredibly helpful and supportive throughout the process. Good luck!!

Great advise Megan! I just posted the same info about the low income programs....❤

Hi Elizabeth & Mike,

YES!! There are government loans/assistance programs in almost every state(47). They're specifically for "lower income" people with less than perfect credit & little down payment. You can read more at:  

You have to meet certain criteria (such as lower income) & there's an online "tool" where you can check to see if you potentially qualify (but don't go by that tool solely, because it isn't very specific to individual situations) but it's a good place to start. Some loan programs (like the one I'm applying for) are for rural areas, population 20,000 or less (I believe). They'll even assist you, from start to finish, if you choose to build your home. It just depends on the program you apply for & the amount of the loan you qualify for. All inspections & guidelines have to be approved by the gov.program & they have a referral list of realtors & contractors in your area, if you need help finding one that works with the "program". There's also a complete Q&A directory. I simply called the # for my area & the service agent I'm working with is wonderful! She is guiding me, step by step, through my "1st time buyer" process. Plus, due to the Covid19 crisis, you can do the majority/all of the paperwork online. One of the loan stipulations (that I found very beneficial) is that 1st time buyers must complete a brief (2 weeks) online course "For buying your 1st home" , so you'll be better prepared for all the potenial costs, repairs, insurance, etc. that come with home ownership. They'll even reimburse you the cost of the education (approx.$75, they'll suggest accredited programs!) You can get the low interest rates with very little down payment. Like I said, there's a few different programs so check them out & see which one is best for you. I hope this information helps you achieve your dream of home ownership! Please keep us posted on the outcome! Best of luck to you both! 🙏🏻❤🏡

For someone who's not working, it might not be the best time to buy a house, but it certainly won't hurt to see what lenderS might say. One lender may have one approach and a different one might say something else. It might be worthwhile to try and find other resources besides commercial lenders, since they usually have a checklist of things they will require to provide a loan, and usually pay stubs are on that list. Conventional lenders want to see some assurance that if they lend someone money, chances are good that they will be repaid. There might be programs for people in different situations that conventional lenders wouldn't even be aware of and talking to them might just be disappointing.
Some of the other posters here had other suggestions for loans and even grant money and those would definitely be something I would check into as other options to just talking to a conventional lender.

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