Real estate financing

Despite what you may have heard, you can buy a home without a down payment or with a small down payment. If you have good credit but minimal savings, you may consider:

First time buyers programs: These programs may be supported by your city or a local housing agency and may pay your down payment for you. Some programs may only require you to pay a few hundred of your own money down.

FHA loan: These loans are available to U.S. citizens and residences and only require you to pay 3.5 percent down. Accepted credit scores are also lower than traditional bank loans.

VA loan: These loans are available without a down payment and do not require private mortgage insurance. Current military members, veterans, reservists and National Guard members may qualify for this loan. You may consider seeing if you qualify for a Navy Federal loan as well.

USDA loan: These loans are offered in certain rural and suburban areas for those who have a low or moderate income. Some are intended to help update and repair homes. They may be called rural repair and rehabilitation USDA loans or grants.

97 percent loans: These are Fannie Mae loans with 97 percent financing. You only have to pay three percent down on these loans.

Briefly, a Lease with an Option to Buy Agreement is a way for renters to make payments towards purchasing a property later. It is a way for renters to move towards eventually purchasing a home if they can't yet obtain traditional financing. The agreement includes everything a standard lease does, plus:

• Option fee: The fee reserved towards the option of buying the property. It may be used towards the down payment or as equity.
• Additional rent: The extra rent is often put towards the purchase of the property.
• Termination: This part of the agreement outlines how a renter my violate their lease and in turn may lose their option to buy.
• Price of home: Sometimes the future purchase price of the property is included in the agreement.

Owner financing is when the owner of a property finances the purchase of the property rather than a bank or traditional mortgage company. Terms are usually flexible since the owner and buyer can agree on what terms are suitable. The owner may choose to finance the entire purchase price or part of it. In most cases, owner financing is not the best option for the seller; however, in a buyer's market, it may be a better option than not being able to sell the property at all.

You can obtain a loan with marginal credit, but the terms may not be the best. You might have to pay a higher interest rate and/or put down a larger down payment. Plus, you'll need to prove that your income earning potential is sufficient to make the payments. If you credit score is over 600, you might even be able to obtain a traditional mortgage. FHA and USDA loans do not require a high credit score.

You may be considering investing in commercial property rather than or in addition to residential properties. There are some distinct advantages to investing in commercial real estate such as:

1. More lenient lease terms. You are not subject to restrictive housing requirements.
2. Triple net leases. Basically, a triple net lease means that the renter pays for everything, including building maintenance and property taxes.
3. Shorter hours of operation. Depending on the business, you are not likely to get a two a.m. phone call you have to respond to. In most cases, you can manage the property during standard business hours.
4. Longer leases. Often commercial leases are for three to five years, or even longer.
5. Tax advantages. Business property allows some advantageous tax deductions. Your accountant can help you navigate taxes related to your commercial properties.