Are there financing options to buy a house with less than 20% down?

I was asked this question recently, and here was my answer:

"Unfortunately, the lending market and atmosphere has changed dramatically in the past 12 months. There is virtually no 0% down financing through conventional channels. That said, if you are a first time home buyer, there are FHA loans available that allow you to purchase a home with ath as little as 3% down (I believe that number is increasing to 3.5% in January). There are some programs out there that allow the seller to credit back a certain % to the buyer for closing costs, so theoretically a 0% down option may be possible that route. Another way to achieve a 0% down purchase is get a conventional 1st loan for 75-80% of the value of the property and then get the seller to carry back a 2nd loan for the remainder. This situation could also be combined with an FHA loan. That type of situation does require a motivated and flexible seller, and expect to pay a significantly higher interest rate on that 2nd loan as the seller is taking the brunt portion of the risk should you, as the buyer, default on the loan.

For anyone that is interested, I'd be happy to talk to you more about the different requirements for FHA or conventional loans. That said, your best bet is to talk to a qualified loan specialist, and I'd be happy to recommend one, or several, here in the Santa Barbara area which are excellent.

Please feel free to call me on my cell phone, any time, at 805-637-7148.