Such loans are offered by government agencies and private lenders, including nonprofit groups and employers. In fact, there are government programs at both the federal and state level to help cash-strapped buyers. Under many state housing agency guidelines, borrowers must usually be first-time home buyers or have a limited family income to qualify for low-down payment loans.
The Department of Housing and Urban Development (HUD) offers several programs through the Federal Housing Administration (FHA) that require down payments of 3 – 5 percent. Fannie Mae, the nation’s largest supplier of home mortgage funds, has many programs for low- and moderate-income home buyers.