Buying a Home in WNC with Zero to Low Down Payment

Amid tightening home supply and near record market activity, the good news for first-time homebuyers is that mortgage rates are continuing to hover at historic lows. However, it’s important to remember that even though home prices are going up, so is rent. One way or another, most adults have housing expenses. You are either going to pay your own or your landlord’s mortgage.

In many places across Western North Carolina, it still makes more financial sense for responsible adults to buy rather than rent. (Of course, this is assuming that other variables like employment and expenses are stable.) Many first-time homebuyers are delaying their home search because they believe they don’t have enough saved for a down payment. According to mortgage professionals, 69% of first-time homebuyers either think it’s very difficult or impossible to get a loan without 20% down.

That’s simply not true.

It takes less of a down payment to buy a home than you may think. In our region, there are local loan programs through Mountain Housing Opportunities, and federal programs through HUD and USDA that offer low or zero down payment loan options. Each of these programs have loan criteria that differs from conventional mortgage options. For a borrower needing a low-to-zero down payment option, they also offer approachable avenues to home ownership.

Keep reading to find the loan program that is best suited to your needs.

Home Buyer’s Down Payment Q&A

Mountain Housing Opportunities

Mountain Housing Opportunities (MHO) is a private, nonprofit community development corporation based in Asheville, NC. They work to build and improve homes, neighborhoods, communities, and lives—and build hope and dignity in the people served. Each year, MHO serves more than 600 households and builds an average of 60+ new homes.

MHO offers several programs to help lower-income families achieve the dream of homeownership:

Turn-Key Homeownership Program

MHO’s Turn-Key Homeownership Program offers new, energy-efficient homes with built-in, no-interest, deferred financing in amounts up to 30% of the purchase price. This financing can help fill the gap between your first mortgage loan amount and the total cost of purchase. With deferred financing, first mortgage amounts may be as low as $120,000. And in many cases, there are no monthly payments on MHO loans until you sell the property or until the note’s maturity date.

Downpayment Assistance Program

Downpayment Assistance of up to $20,000 can fill the cash gap between the amount of your first mortgage and the total cost to purchase a home. While these loan funds can be used for down payment, they can also be used to cover closing costs or to simply increase your purchasing power. In many cases, there are no monthly payments on MHO loans until you sell the property or until the note’s maturity date.

Self-Help Homeownership

Through the Self-Help Homeownership program, neighbors work alongside one another to build community from the ground up. Your labor is your down payment! The program makes homes affordable by allowing families to contribute “sweat equity” toward the purchase of their home. A Self-Help group of 5–8 families work together under the guidance of a construction supervisor to build their homes together. The program is labor intensive, but also immensely rewarding. The typical Self-Help homeowner will achieve a $15,000–$25,000 equity position and many borrowers also qualify for an interest rate subsidy based on their household income.

USDA Direct Loan Packaging

If you are buying a home in an eligible suburban or rural area, MHO can help with that, too. They partner with USDA (United States Department of Agriculture) to provide section 502 direct home loans. These USDA Direct Loan Packages are low-interest loans with supplemental payment assistance. Assistance is based on household income, ensuring affordable monthly payments. If you’re considering a USDA home loan anyway, consider contacting MHO first.

Government Assistance

The Department of Housing and Urban Development (HUD) actively supports first-time homebuyers. But even if this is not your first home, you may still qualify for benefits.

HUD considers “first-time homebuyers” to include those who have not owned a home within the previous three years or those who owned with a former spouse while married.

If this is you, you may benefit from various HUD-funded programs including loan programs that offer lower down payments to teachers, firefighters, and other vocations. HUD also offers federal assistance at the state level. In North Carolina, Homeowner Assistance Programs include:

HUD also assists with housing for seniors, veterans, and Native Americans, as well as rural housing programs and extended homeowner warranties. Learn more about HUD homebuyer programs by contacting your Beverly-Hanks agent or mortgage representative, or by visiting

Get Preapproved for Your Home Loan Today!

Beverly-Hanks Mortgage Services’ mission is to make the process of financing real estate easy and enjoyable. We offer a broad array of financing options, and we are continually revising our products to offer you the most competitive alternatives. All loans are processed under our supervision—from application through closing. That means our team of professionals is available from start to finish to answer your questions and ensure the level of attention and service you deserve.

Find out how together we can make your dream home a reality. Learn more about Beverly-Hanks Mortgage Services and calculate your payments today.


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