FHA 100% CLTV Down Payment Assistance: The No-Money-Down Option for Renters Ready to Buy

“This program exists to bridge the gap between renters and homeownership, without requiring years of saving. It’s not a gimmick. It’s a real solution.” — Amber Jones, Certified Mortgage Advisor

If you're a renter who feels stuck—paying high monthly rent while trying (and failing) to save for a home—you're not alone. For many hopeful buyers, the biggest obstacle isn’t qualifying for a mortgage… it’s coming up with the down payment and closing costs.

But what if you could buy a home with no money down, no income limits, and even if you’re not a first-time buyer?

Enter: FHA 100% CLTV down payment assistance.

This powerful (and often overlooked) program is changing the game for renters across the country. Whether you've had credit hiccups or just haven’t had the chance to save, here’s everything you need to know about this unique opportunity.

What Is the FHA 100% CLTV Program?

The FHA 100% CLTV (Combined Loan-to-Value) program offers true no-down-payment financing by pairing a standard FHA loan with a second mortgage that covers the required 3.5% down payment.

Let’s break it down:

• Primary Loan: FHA-backed mortgage at 96.5% LTV

• Second Loan: Covers the remaining 3.5%, bringing you to 100% CLTV

• Result: You can purchase a home without putting any money down for the down payment

This program stands out because:

✅ No first-time homebuyer requirement
✅ No income limits
✅ Available nationwide (except New York)
✅ Open to repeat buyers and those with credit challenges

🎥 Watch: FHA 100% CLTV Explained

If you’re more of a visual learner or want a quick overview, here’s a video breakdown where I walk you through this no-down-payment FHA program step-by-step:

Then, keep reading below for a deeper dive into how it works, who qualifies, and what to watch out for.

Who This Program Is Perfect For

This program was designed with real people in mind—not just textbook-perfect borrowers.

It’s a game-changer if:

• You're paying high rent and struggling to save for a down payment

• You don’t have access to gift funds or retirement savings

• You’ve had past credit issues but are financially stable now

• You're a repeat homebuyer but still need assistance

• You need help covering closing costs, too

How It Works: Two Loans, One Path to Homeownership

Here’s how the structure plays out:

🏠 Loan #1: Your Traditional FHA Mortgage

• Covers 96.5% of the home price

• 30-year fixed rate

• Includes upfront and monthly mortgage insurance

• Follows standard FHA underwriting guidelines

💸 Loan #2: The Down Payment Assistance

• Covers the remaining 3.5%

• 10-year fixed rate, 2% higher than the 1st loan

• Can also help with closing costs

• Not a grant — it’s a repayable second mortgage

• No separate credit pull or income verification

• Must close at the same time as the first loan

👉 Example: If your first loan is at 6.5%, the second loan will be at 8.5%.

The second loan is administered by the National Homebuyer Fund, except in Washington State where it’s handled by a local housing finance cooperative.

Program Requirements at a Glance

Here’s what you need to qualify:

✅ Minimum Credit Score

• 600 with automated underwriting

• 660 if manual underwriting is required

✅ Debt-to-Income (DTI) Ratios

• Up to 56% with automated approval receiving "approve/eligible" findings

• Up to 45% with manual underwriting

✅ Property Types Allowed

• Single-family homes

• FHA-approved condos or spot approvals

• PUDs (Planned Unit Developments)

• Duplexes (must live in one unit)

• Double-wide manufactured homes on owned land

❌ Ineligible Property Types

• Co-ops

• Condotels

• Farms/ranches or income-producing land

• 3- to 4-unit properties

• Mobile homes on leased land (such as those in mobile home parks)

Extra Perks

• Gift funds and seller credits (up to 6%) allowed

• Eligible for non-occupant co-borrowers

• Can be paired with a 2-1 buydown to reduce your rate in the early years

• FHA’s flexible guidelines still apply (great for student loan borrowers)

What to Consider Before Applying

This program opens doors for many, but it’s important to go in with eyes wide open. Here’s what to keep in mind:

• 🔁 You can refinance later, but you’ll need to pay off the second loan—it can’t be subordinated

• 📄 You’ll have two monthly payments

• 🏡 You must occupy the home within 60 days and live in it for at least one year

• 🧾 You’ll need to complete a homebuyer education course through a HUD-approved agency

Real Talk: Is This a Forgivable Grant?

No. This is not a forgivable grant.

You are borrowing the down payment and must repay it over 10 years—just like any other fixed loan. But since it’s structured as a low-balance, fixed-rate second mortgage, it’s predictable and manageable.

Think of it as a bridge—getting you into a home now, instead of waiting years to save that 3.5%.

Frequently Asked Questions (FAQ)

❓ What credit score do I need?

• 600 minimum if you get an automated underwriting approval

• 660 minimum if manual underwriting is required

❓ What are the DTI (debt-to-income) limits?

• Up to 56% DTI with automated approval

• 45% max DTI for manually underwritten loans

❓ Is this a forgivable grant?

• No. This is a repayable second mortgage (10-year term, fixed rate)

❓ How does it treat student loans?

• Uses the actual monthly payment shown on your credit report

• If no payment is listed, 0.5% of the balance is used as the estimated payment

❓ What if I’ve had a bankruptcy or foreclosure?

• Bankruptcy: Must be at least 2 years (Chapter 7) or 1 year (Chapter 13 with on-time payments)

• Foreclosure: At least 3 years from completion

• Derogatory Credit: Evaluated based on recency, severity, and recovery

Final Thoughts: Why This Matters for Renters

Renting doesn’t have to be your forever situation.

If high rent has made it impossible to save for a down payment—or you’re feeling locked out of homeownership for other reasons—this program was built for you.

✅ No down payment
✅ No income limits
✅ Available for first-time and repeat buyers
✅ Flexible guidelines

“You don’t have to wait years to save. You might be ready to buy right now—and I’m here to help you find out.” — Amber Jones

Ready to See If You Qualify?

Let’s have a quick, no-pressure chat.

📅 Book a free 15-minute consultation with Amber to find out if this program—or another—could be your best next step. 🔗www.loansbyamberjones.com/book-a-call