Welcome to Rhode Island!!
Donnie Bennett


No Money Down MORTGAGE MATTERS BOXED and shrunk for FB v2I recently sat down with Nick Viveiros, Senior Loan Officer at Primary Residential Mortgage in Cranston, RI.  Our conversation was a general meeting about the state of the market in the Ocean State (very positive), mortgage rates (still low) and the popularity of certain loan programs.

What stood out – was the fact that many people are still unaware of their options.  We talked about how the average person has no clue about all the different mortgages out there – even if they happen to have a mortgage that they are currently paying on.

But the fact is, there are all kinds of mortgages to fit the needs of home buyers – especially first time home buyers.  There are conventional loans that require the buyer to invest 20% or more in to their purchase, and FHA loans that offer a low down payment of just 3.5%.  There are even programs that allow you to buy a home with NO MONEY DOWN!

The entire conversation with Nick made it pretty clear – we need to get the word out so that anyone considering their first home gets the opportunity to save as much money as possible, as they make the leap in to the biggest transaction of their lives.

No sooner than I had returned to my office – Nick was kind enough to forward me the following information on FIVE WAYS you can obtain a loan FOR NO MONEY DOWN.

#1) VA LOAN – VA stands for Veterans Administration.  This type of loan is customized for active or former military members.  Those who qualify will receive 100% financing on the purchase loan and there is no mortgage insurance.  The borrower does have to pay a “funding fee”, but that can also be rolled in to the loan.

The VA funding fee varies, depending on whether the veteran served in the regular military versus the reserves or National Guard.  Another barometer is whether or not it is the borrower’s first VA loan or not.  The funding fee can be as low as 2.15% or as high as 3.3% (of the loan amount).

#2) NAVY FEDERAL – Navy Federal Credit Union is the nation’s largest credit union, in assets and membership.  The Navy Federal loan is nearly identical to the VA Loan.  It provides 100% financing to qualified members for the purchase of a primary residence, however the eligibility is more expanded.  It is available to members of the military, some civilian employees of the military and the U.S. Department of Defense – and family members too.

The cost of this loan is actually lower than the VA loan.  The funding fee for the Navy Federal loan is only 1.75% of the total loan amount and can only be obtained directly from them.

#3) USDA LOAN – USDA stands for United States Department of Agriculture.  The USDA’s Rural Development Guaranteed Housing Loan Program is so popular that it has been known to run out of money before the end of each fiscal year.  These loans are targeted by area. They are designed to help potential buyers finance homes in lowly populated regions.

Many borrowers are pleasantly surprised to find out that these “Rural Development” loans aren’t confined to just farmland.  This is a great loan for a primary residence far outside of “city limits”.

The USDA has maps on its website that highlight eligible areas.  In addition to geographical limits, the USDA program has restrictions on household income.  It is intended for first-time buyers, although there are exceptions.

The USDA mortgage comes from a bank, and there is no mortgage insurance.  Instead, the USDA levies a 2% upfront guarantee fee (which can be rolled in to the loan amount) along with an annual guarantee fee of 0.5% of the loan balance (EXAMPLE: On a $200K loan, that would be $1K – with the amount reducing each year in direct proportion to the balance).

#4) OCEAN STATE GRAD GRANT PROGRAM – This is a program to help recent college graduates purchase a home in Rhode Island.  To qualify – you must close on your loan within 3 years of graduating from an accredited institution, having earned your associates, bachelors, masters or doctoral degree.  It makes no difference if the borrower has graduated from an institution in Rhode Island or elsewhere.  Its stated purpose is to make purchasing a home more attractive to recent college grads.

A qualifying borrower could receive 3.5%, of the purchase price, up to $7,000 towards down payment.  Those funds are not a loan.  There is no repayment – provided that you maintain ownership of the home for at least 5 years.

It should be noted that an FHA LOAN requires a 3.5% down payment – as such, by participating in the Grad Grant Program, that 3.5% down payment would be completely covered.  Consequently this is yet another way to achieve a loan with NO MONEY DOWN.

#5) FIRST HOMES 100 LOAN – This is a Rhode Island Housing loan product for first-time home buyers. It offers a low, fixed rate on a 30-year mortgage with options for no-money down and closing cost assistance. It has the additional advantage of allowing buyers to roll repair expenses in to the loan.

On top of all that, if a person is eligible, their loan will have no mortgage insurance – PLUS – they can receive a tax credit, worth up to $2,000 per year, for the entire life of the loan.


Now – I may have dressed some of that up but I’d like to thank Nick Viveiros for his contribution to the education my regular readers.  I do, however, need to add the following…

The Ocean State Grad Grant Program is essentially a mechanism to receive funds that will offset the down payment of an FHA loan.  So while it’s not a 100% financing program – it is a great way to turn an FHA program in to one.

What I’d like to address now is the other four loans that I outlined.

VA, NAVY FEDERAL, USDA and FIRST HOME loans are factually all NO DOWN PAYMENT programs.  Even so there are a couple of things that you should know and understand, in order to move forward with obtaining one of those loans to complete your purchase.

The first thing would be the fact that even though the lender is offering you your loan with no upfront investment, that does not mean that you won’t have to make an upfront investment, in the form of an “earnest money deposit”.

For instance – let’s say the purchase price is $200,000.  Even though the loan requires no investment from you, it does not necessarily mean that the seller of the home is going to be comfortable or even remotely interested in taking their home off of the market and entering in to an agreement with you without some sort of deposit in their escrow account.  Consequently a deposit WILL be needed – just to show that seller that you have some “skin in the game”.  The trick is to negotiate the lowest possible amount possible, since it will come right out of your pocket at the time of signing your purchase agreement.

THE GOOD NEWS… is the fact that when you are financing with one of these “NO MONEY DOWN” loans… any money that you may have invested for the earnest money deposit will be returned to you at the closing table.  That means you will walk out of your closing with the keys to your new home… AND a cashier’s check, in whatever amount that you initially invested.

Also… don’t be fooled by listing agents who tell you that the minimum deposit required is some set number.  I have seen a pattern of certain franchise affiliated agents, throwing the number “$5,000” as the minimum that they will accept.  The fact is… THERE IS NO SUCH THING as a “minimum deposit” amount – regardless of what they may have falsely schooled their seller clients on being expectant of.


Another thing to consider… is the fact that you can obtain 100% financing through a LOCAL LENDER!

Yes… that’s right. VA, USDA, and FIRST HOME loans – along with the OCEAN STATE GRAD GRANT PROGRAM – are all available by contacting a local lender.  With all my years in the business I’ve certainly met my fair share – and THEN some.  That being said – I have a fiduciary responsibility to my clients and I cannot steer them all to one lender over another, I need to provide options.  If you’d like a full list of local lenders, who I would highly recommend, please contact me.

Please remember that I am here to bring you REAL ANSWERS to your REAL ESTATE questions. I am now accepting new Buyer and Seller clients in preparation for the spring 2016 selling season… or even if you are one of the smart sellers who knows that LISTING IN THE WINTER is actually a great way to avoid the competition and command top dollar by dealing from a position of strength.

So whether you’re thinking of SELLING in 2016 or beyond – or if you’re looking to BUY RIGHT NOW… no question is too small… feel free call.

 Trust me… I’m an AWESOME REALTOR!!

For more information… or for details on any specific property you might be consider buying (whether money is no object, or every penny counts)… please reach me anytime… 7 days per week. My team and I serve residential buyers and sellers all over New England… with affiliates around the world! Are you a FSBO SELLER? Call me for my complete guide to SELLING YOUR HOME ON YOUR OWN!

Thanks for visiting my website. Rhode Island is my home, and I’m always here to help.


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Donnie Bennett

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Donnie Bennett

Team Leader, Residential Expert, REALTOR®


401-269-9615401-269-9615 main


931 Jefferson Blvd., Suite 2006 - Warwick, RI 02886

Donnie Bennett, REALTOR®​ Serving Rhode Island