No money down financing: five questions to ask before you make an offer

The listing for 1306 Garth Ave SW says to ask about no money down financing, and you should. But "no money down" is a family of programs, not one product, and the details decide whether it works for you. Before you make an offer, put these five questions to your lender.

1. Which program are we actually talking about?

No money down financing can mean a USDA loan in an eligible area, a VA loan for qualifying veterans, a down payment assistance grant, or a lender-specific product. Each has different eligibility rules, so ask the lender to name the program and explain why you qualify for it.

2. What are the income and location limits?

USDA loans, for example, are tied to income caps and property location, and down payment assistance programs often have their own limits. Confirm that this address and your household income fit the program before you get attached to the idea.

3. What does the rate and payment look like compared to a conventional loan?

A zero down payment can come with a higher interest rate, mortgage insurance, or both. Ask for the full picture: rate, monthly payment, closing costs, and how much total interest you pay over the life of the loan. Compare it against a conventional loan with a modest down payment so the decision is about math, not marketing.

4. What are the closing costs, and who pays them?

No money down usually means no down payment, not no closing costs. Appraisal, title, and lender fees still exist. Ask whether the seller can contribute concessions, and get a written estimate of what you will need at the closing table.

5. What happens if the appraisal comes in low?

Every offer has an appraisal contingency, and low appraisals happen. Ask your lender how a short appraisal affects the loan amount and whether the program has flexibility on the purchase price. Knowing the answer before you negotiate saves a lot of stress later.

None of this is financial advice, and every borrower's situation is different. It is a starting list of questions. The agent for this property can connect you with lenders who work these programs in the Decatur area, and the open house on Sunday, Sept 13 from 2 to 4 PM is a good place to start the conversation.