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For many years, coming up with a mortgage down payment was a bar to home ownership for many people. Lenders typically used to ask for a deposit
of 20% of the purchase price, a sum too large for many people to lay their hands on. Since the mid-1990s all this has changed as lenders have gradually
increased the loan-to-value rate and it is now possible to obtain mortgages of up to 110%, which will cover purchase and closing costs too.
In addition, several other methods have been introduced over the last ten years that enable borrowers to obtain a no down payment mortgage. For example, VA loans (from the Department of Veterans Affairs) are available to active and retired members of the military service (plus certain others). Alternatively you can use a line of credit secured by the equity in another property; this allows you to purchase a property using the accumulated equity in a home without selling the original property. A third method is offered by the Office of Housing and Urban Development (HUD); their aim is to help low-income families to obtain their first home without having to find a large down payment first.
The federal government also has job related schemes to help home buyers; farmers and police officers are currently the targets for these special programs. Lastly, many states, counties and cities offer local programs that can eliminate down payments, although in many cases there are entry criteria, such as the need to meet income requirements, hold certain jobs, be a first-time buyer or agree to buy in a specific area.