10 alternative ways to buy a house without a mortgage

Rent-to-own

A rent-to-own agreement could be a great option if you are looking to buy a house without a mortgage, since it lets you lease the property and eventually buy it straight from the landlord. A couple advantages of a rent-to-own agreement include securing the property at its current market price and the fact that you are not tied to a formal mortgage, allowing you to save the funds in the lease period and buy the home later.

Apply for a government loan

Applying for a government loan can make purchasing a property more affordable. There are plenty of options, including the Federal Housing Administration’s loans with down payment requirements of about 3.5%. This is a great option for first-time homebuyers because it is an easy way to purchase a home without spending too much on a down payment. Another type of government loan on offer is a VA loan that has special advantages for servicemembers, such as veterans, reservists, and members of the National Guard. There is also a rural housing loan program for potential homebuyers looking to settle in rural areas.

Use crowdfunding

Using crowdfunding is similar to applying for a private loan—the difference of course being you are asking strangers as well. For this admittedly new approach, it is important to be honest about what you are looking for and why. It may surprise you how many people will be willing to help you realize your homeownership dreams.

Search for a property with shared equity

Searching for a property with shared equity means the ownership is divided between two parties: the buyer and the investor. While the investor typically holds a higher percentage, with a shared equity the two parties agree to specific percentages of the property’s ownership. Because the investor contributes more to the overall percentage of the down payment, shared equity allows homebuyers to reduce their initial deposit.

Consider a tiny home

Tiny homes are much cheaper than single-family homes that need a mortgage to supplement their high market prices. When we say a tiny home, we mean a home that is 600-square feet that includes adequate living space, ideal location, yard space, and more. Sacrificing a little space could see you in a home for as little as $20,000.