Yes, but only through specific loan programs, and they come with real tradeoffs
You can buy a house with zero down payment, but only if you meet the requirements of one of a few loan types designed for it. The most common are VA loans (for military members and veterans), USDA loans (for rural properties), and certain FHA loans (for first-time buyers with lower credit scores). Conventional loans—the standard 30-year mortgages most people get—almost always require at least 3 to 5 percent down. No-down-payment loans exist because Congress created them to expand homeownership in specific groups or areas, not because lenders want to take that risk.
The catch is that when you put nothing down, the lender absorbs more risk, so they charge you for it. You will pay higher interest rates, higher monthly payments, and mandatory mortgage insurance (a monthly fee that protects the lender if you stop paying). Over the life of a 30-year loan, this costs tens of thousands of dollars more than putting 10 or 20 percent down. You also have no equity cushion—if the house value drops or you need to sell quickly, you could owe more than the house is worth.
Key Takeaways
- VA loans and USDA loans allow zero down payment for may be able to access borrowers, but VA loans are only for military members and veterans, and USDA loans only for rural properties.
- FHA loans allow down payments as low as 3.5 percent, not zero, though some first-time buyer programs may cover that cost.
- No-down-payment loans charge higher interest rates and require mortgage insurance, which adds hundreds of dollars per month to your payment.
- You build no equity in the first years and risk owing more than the house is worth if property values drop or you need to sell quickly.
- The real cost of zero down is paid over 30 years through higher interest and insurance, not upfront.
VA loans: zero down for military and veterans
If you served on active duty, are a current member of the National Guard or Reserves, or are a surviving spouse of a service member, you may be may be able to access for a VA loan. These loans require no down payment and no mortgage insurance. The Department of Veterans Affairs guarantees a portion of the loan to the lender, which is why lenders will approve it with zero down.
The tradeoff is a VA funding fee—a one-time charge (usually 1.25 to 3.6 percent of the loan amount) that gets rolled into your mortgage. For a $300,000 house, that fee could be $3,750 to $10,800 added to what you owe. You pay it over 30 years as part of your monthly payment. The fee is waived for some disabled veterans, but most borrowers pay it.
VA loans also have a certificate of may be able to access requirement. You get this from the VA before you start house hunting. The process takes a few days to a few weeks online through VA.gov or by mail. Without it, lenders will not approve you.
USDA loans: zero down for rural properties
The U.S. Department of Agriculture offers USDA loans for homes in rural areas—not just farms, but small towns and suburbs outside major cities. The USDA defines "rural" by zip code, and you can check whether your target property qualifies on the USDA website before you make an offer.
USDA loans require no down payment and no mortgage insurance in the traditional sense. Instead, you pay a may provide fee (1 to 2 percent upfront, rolled into the loan) and an annual annual fee (0.35 to 0.55 percent of the loan balance each year). Over 30 years, these fees add up to roughly the same cost as mortgage insurance on an FHA or conventional loan.
Income limits apply: your household income cannot exceed 115 percent of the area median income for your county. For a family of four in a rural area, this might be $80,000 to $120,000 depending on location. You also cannot have owned a home in the past three years (with narrow exceptions for displaced persons).
FHA loans: 3.5 percent down, not zero
FHA loans allow down payments as low as 3.5 percent, which is the lowest widely available option for conventional borrowers. On a $300,000 house, that is $10,500 down. This is not zero, but it is close enough that some first-time buyer programs or gifts from family can cover it.
FHA loans require mortgage insurance for the life of the loan if you put down less than 10 percent. This insurance costs 0.55 to 0.80 percent of the loan balance annually—roughly $165 to $240 per month on a $300,000 loan. You cannot remove it even after you build equity, so it stays in your payment for all 30 years.
FHA loans have looser credit score requirements than conventional loans (some lenders approve scores as low as 580), which is why they are popular with first-time buyers. But the mortgage insurance cost is steep, and it never goes away.
What happens to your monthly payment with zero down
The difference between zero down and 10 or 20 percent down is not just the down payment itself—it is the interest rate, the loan amount, and the insurance you carry for years.
| Scenario | Down Payment | Loan Amount | Interest Rate | Monthly Payment (est.) |
|---|---|---|---|---|
| Zero down (VA or USDA) | $0 | $300,000 | 6.5% | $1,896 |
| 3.5% down (FHA) | $10,500 | $289,500 + insurance | 6.75% | $1,950 |
| 10% down (conventional) | $30,000 | $270,000 | 6.25% | $1,615 |
| 20% down (conventional) | $60,000 | $240,000 | 6.0% | $1,439 |
These are estimates based on current market conditions and will vary by lender, credit score, and location. The point is that zero down does not mean zero cost—it means the cost is spread across your monthly payment and your interest rate instead of paid upfront.
The risk of owing more than the house is worth
When you put zero down, you start with zero equity. If the house value drops 5 or 10 percent in the first few years (which happens in many markets), you immediately owe more than the house is worth. This is called being underwater on your mortgage.
If you need to sell or refinance while underwater, you have to pay the difference out of pocket. If you cannot pay, you cannot sell. If you stop paying the mortgage, the lender forecloses, and you lose the house and damage your credit for seven years. This risk is real and happened to millions of homeowners during the 2008 housing crisis.
With 10 or 20 percent down, you have a buffer. A 5 percent drop in value still leaves you with equity, so you can sell or refinance without being trapped.
When zero down makes sense
Zero-down loans are worth considering if you are a veteran with a VA loan (the funding fee is the only real cost, and rates are competitive), or if you are buying a rural property and may have access to for a USDA loan. Both of these programs were designed to make homeownership possible for specific groups, and they work.
For everyone else, the math usually favors saving for a 5 to 10 percent down payment. Even a small down payment lowers your interest rate, removes or reduces mortgage insurance, and gives you equity from day one. If you cannot save that much, renting while you save is often cheaper than paying the insurance and higher rates on a zero-down loan.
The exception is if you are in a strong market where home prices are rising faster than you can save. In that case, buying now with zero down and refinancing later (once you have built equity or rates drop) can make sense. But this requires a stable income and the ability to handle a higher payment if rates rise.
Frequently Asked Questions
Do I need perfect credit to get a zero-down loan?
No. VA loans typically require a credit score of 580 or higher, and USDA loans usually require 640 or higher. FHA loans go as low as 580. These are lower than conventional loans (which often want 620 or higher), but you still need a score in the acceptable range. Late payments, collections, or high debt will disqualify you regardless of the loan type.
Can I use a gift from family to cover a down payment?
Yes, for FHA and conventional loans. The gift must come from a blood relative or someone with a documented family relationship, and the lender will ask for a signed letter from the gift-giver stating it is a gift, not a loan. VA and USDA loans also allow gifts. You cannot borrow the down payment from anyone—it must be your own money or a true gift.
What if I want to put zero down but do not may have access to for VA or USDA?
Your only option is FHA at 3.5 percent down, or to wait and save. Some state and local first-time buyer programs offer down payment assistance, but these vary widely by location and often have income limits. Contact your local housing authority or search your state's housing finance agency website to see what programs exist in your area.
Can I remove mortgage insurance later if I put zero down?
On FHA loans, no—if you put down less than 10 percent, the insurance stays for the full 30 years. On conventional loans, you can remove it once you reach 20 percent equity, but zero-down conventional loans are extremely rare. VA and USDA loans do not have traditional mortgage insurance, so there is nothing to remove.
What if the house value drops after I buy with zero down?
You are underwater—you owe more than the house is worth. You cannot sell without paying the difference, and you cannot refinance because the lender will not lend more than the house is worth. Your only options are to stay in the house until values recover, make extra payments to build equity faster, or walk away (which destroys your credit). This is why zero down carries real risk.