# 5 Ways to Finance a Rental Property That Nobody Knows About Source: https://www.youtube.com/watch?v=ZRsbqpocN_o Recap page: https://rapidrecap.app/video/ZRsbqpocN_o Generated: 2026-02-04T14:34:00.898+00:00 --- ## Quick Overview The five under-the-radar financing options for real estate investors that overcome traditional barriers include NACA Loans (0% down, 5% rate), USDA Loans (0% down), Seller Financing (no bank needed), Assumable Mortgages (3% rates), and Non-QM Loans (no W2 needed), offering powerful alternatives to conventional financing for entrepreneurs, especially those targeting lower-income markets or seeking to scale quickly. **Key Points:** - NACA Loans offer 0% down payment, 0% closing costs, no fees, and no mortgage insurance, with rates as low as 4.75% (as of February 2nd, 2024), specifically targeting underserved communities. - USDA Loans provide 0% down payment financing, though they are restricted to rural or suburban areas defined by the USDA eligibility map, not major metropolitan areas. - Seller Financing allows investors to bypass banks entirely, structuring terms directly with the seller, which can result in lower interest rates (e.g., 3%) and often allows for non-owner-occupied purchases. - Assumable Mortgages are beneficial because the buyer can take over the seller's existing low-interest-rate mortgage (like 3% rates from the COVID era), although this depends on the loan terms. - Non-QM (Non-Qualified Mortgage) loans are designed for entrepreneurs who may not have W2 income documentation, often relying on bank statements, and can be used for multi-family properties up to four units. - The main hurdle for these loans is that the process can be slower (6 months to a year for NACA) or require specific documentation/location/credit profiles. - The video strongly encourages investors to research these options, especially Seller Financing, as it creates a win-win negotiation opportunity where the seller can defer taxes. ![Screenshot at 00:17: The screen displays a graphic listing the five under-the-radar rental property loans being discussed: NACA, USDA, Seller Financing, Assumable Mortgages, and Non-QM Loans.](https://ss.rapidrecap.app/screens/ZRsbqpocN_o/00-00-17.jpg) **Context:** This video, hosted by Henry Washington and co-hosted by Dave Meyer, serves as a tutorial listing five alternative financing strategies real estate investors can use to bypass the restrictive requirements often associated with conventional mortgages. The hosts emphasize that many investors stop scaling due to perceived financing barriers, but these lesser-known options can provide significant advantages, such as 0% down payments or lower interest rates, especially for those investing in small-town or lower-income markets. ## Detailed Analysis The discussion centers on five alternative financing methods that real estate investors can use to acquire property without relying on traditional, restrictive bank loans: NACA Loans, USDA Loans, Seller Financing, Assumable Mortgages, and Non-QM Loans. NACA Loans are highlighted for offering 0% down, 0% closing costs, no fees, and no mortgage insurance, with rates around 4.75% to 5.25% (as of Feb 2024), though they require mandatory workshops and take 6 months to a year to close. USDA Loans offer 0% down but are geographically restricted to rural/suburban areas, which the USDA map tool (shown on screen) helps verify. Seller Financing is praised because the seller becomes the bank, allowing for negotiation on terms like interest rates (as low as 3% mentioned) and tax deferral, making it mutually beneficial. Assumable Mortgages allow buyers to take over existing low-rate mortgages, a significant advantage if the seller secured financing during periods of low interest rates (like the 2020-2021 period shown on the rate chart). Finally, Non-QM Loans cater to entrepreneurs without W2 income, often using bank statements, and can be used for up to four units. The hosts stress that while these options exist, they require due diligence and negotiation skills to structure favorable terms, unlike conventional loans which often have rigid qualification rules, especially regarding down payments and income verification. ### Introduction - Financing Barriers Removed: Financing is a major barrier to entry for investors; this episode reveals five lesser-known loans to overcome this hurdle - NACA Loans (0% down, 5% rate) - USDA Loans (0% down) - Seller Financing (No Bank) - Assumable Mortgages (3% Rates) - Non-QM Loans (No W2 Needed) ### NACA Loans Details - NACA (Neighborhood Assistance Corporation of America) is a non-profit offering 0% down, 0% closing costs, no fees, and no mortgage insurance; rates as of Feb 2nd, 2024, were 5.25% (30-year fixed), but require mandatory workshops and take 6-12 months to close. ### USDA Loans Requirements - These loans are provided by the USDA Department of Agriculture and require the property to be in a designated rural/suburban area, which can be checked using the USDA eligibility map tool shown on screen. ### Seller Financing Benefits - This method bypasses banks entirely, allowing the seller to act as the lender, which can result in lower interest rates (e.g., 3%) and allows the seller to defer capital gains taxes, creating a win-win negotiation. ### Assumable Mortgages & Non-QM Loans - Assumable mortgages allow buyers to take over existing low-rate loans (like 3% from the COVID era). Non-QM loans are for entrepreneurs without W2s, often relying on bank statements, and can finance up to four units. ### Concluding Advice - Success with these creative financing methods requires diligence, negotiation skills to tailor terms to the seller's needs, and utilizing agents/consultants familiar with these specialized products. ![Screenshot at 00:00: Host Henry Washington introduces the topic of financing alternatives that investors should know about.](https://ss.rapidrecap.app/screens/ZRsbqpocN_o/00-00-00.jpg) ![Screenshot at 00:27: On-screen text highlights the attractive terms of some alternative financing options: $0 down, $0 closing costs, 5% interest rates, and No credit check.](https://ss.rapidrecap.app/screens/ZRsbqpocN_o/00-00-27.jpg) ![Screenshot at 01:04: A graphic titled 'In This Episode' lists the five specific financing strategies to be covered, including NACA, USDA, Seller Financing, Assumable Mortgages, and Non-QM Loans.](https://ss.rapidrecap.app/screens/ZRsbqpocN_o/00-01-04.jpg) ![Screenshot at 01:47: A screenshot of the NACA website highlighting their mortgage benefits like no down payment and no closing costs.](https://ss.rapidrecap.app/screens/ZRsbqpocN_o/00-01-47.jpg) ![Screenshot at 07:02: The USDA Loans website eligibility map is displayed, showing eligible areas across the US.](https://ss.rapidrecap.app/screens/ZRsbqpocN_o/00-07-02.jpg)