Yes, but only through specific loan programs—and they come with real tradeoffs

You can buy a home without a down payment, but you cannot do it through a conventional mortgage. Instead, you use a loan backed by a government agency: the Federal Housing Administration (FHA), the U.S. Department of Veterans Affairs (VA), or the U.S. Department of Agriculture (USDA). Each program has different rules about who qualifies, what the home must be, and what you pay in return for putting down nothing.

The catch is that zero down payment does not mean zero cost. You will pay mortgage insurance, higher interest rates, or both—meaning your monthly payment is larger than it would be if you had saved a down payment. You also need to may have access to based on income, credit score, and debt, which is harder without a down payment to show you can save money.

Key Takeaways

  • VA loans (for military members and veterans) and USDA loans (for rural areas) can be obtained with zero down payment and no mortgage insurance, but VA and USDA loans have strict may be able to access rules and property requirements.
  • FHA loans allow down payments as low as 3.5 percent but require mortgage insurance for the life of the loan, adding $100 to $300+ per month to your payment depending on the loan size.
  • Without a down payment, lenders require a higher credit score (usually 620 or above for FHA, 640+ for conventional) and lower debt-to-income ratio to offset the risk.
  • Your interest rate will be higher on a zero-down loan than on one with a 20 percent down payment, because the lender has more at risk if the home loses value.

VA loans: zero down for military and veterans

If you served in the military, a VA loan is the only zero-down option with no mortgage insurance. The Department of Veterans Affairs guarantees part of the loan to the lender, so the lender accepts the risk without requiring you to put money down or buy insurance.

To use a VA loan, you need a Certificate of may be able to access, which you request from the VA. You must have served at least 90 days of active duty (or 181 days during peacetime), or be the surviving spouse of a service member who died in service or from a service-connected disability. The VA does not set a maximum loan amount, but individual lenders do—most will lend up to $766,550 in 2024, though this varies by county and lender.

The home must be your primary residence, and you cannot use a VA loan to buy an investment property or a second home. The lender will order a VA appraisal to make sure the home is worth what you are paying. If the appraisal comes in low, you either renegotiate the price or walk away—the VA will not let you borrow more than the home is worth.

USDA loans: zero down in rural and suburban areas

The USDA Rural Development loan program offers zero-down mortgages in areas the USDA classifies as rural or suburban. Like the VA program, USDA loans have no mortgage insurance. The USDA guarantees the loan, so the lender takes less risk and does not charge you for it.

You must live in an may be able to access area—the USDA maintains a map on its website where you can search by address or zip code. Most rural counties may have access to, but some suburban areas near cities do not. The property must be a single-family home, and it must be your primary residence.

Income limits apply: your household income cannot exceed 115 percent of the median income for your county. For a family of four in a rural county, this might be $90,000 to $120,000 depending on where you live. You also need a credit score of at least 580, though 640 or higher makes approval easier. The USDA will verify your income with tax returns and pay stubs, and will check your credit report for late payments or collections.

FHA loans: 3.5 percent down with mortgage insurance

If you do not may have access to for VA or USDA, an FHA loan is the most common path to homeownership with minimal money down. FHA loans require a minimum down payment of 3.5 percent, which is not zero but is much lower than the 10 to 20 percent most conventional lenders require.

The tradeoff is mortgage insurance. Because the FHA insures the loan, you pay an upfront mortgage insurance premium (usually 1.75 percent of the loan amount, added to your loan balance) and an annual mortgage insurance premium (0.55 percent to 0.80 percent per year, depending on the loan size and down payment). On a $300,000 loan, that adds roughly $150 to $250 per month to your payment.

FHA loans require a credit score of at least 580 to may have access to, though 640 or higher makes approval more likely and may lower your interest rate. Your debt-to-income ratio (total monthly debt payments divided by gross monthly income) cannot exceed 43 percent, though some lenders will go to 50 percent if you have strong savings or a co-borrower. The home must be your primary residence and must pass an FHA appraisal, which is stricter than a conventional appraisal—the inspector checks for safety hazards, and the appraiser will not approve a home that is in poor condition.

What happens to mortgage insurance on FHA loans

On an FHA loan, mortgage insurance does not go away when you reach 20 percent equity in the home. If you put down less than 10 percent, you pay mortgage insurance for the entire life of the loan—30 years if you take out a 30-year mortgage. If you put down 10 percent or more, mortgage insurance drops off after 11 years.

This is a major cost difference. On a $300,000 FHA loan with 3.5 percent down, mortgage insurance costs roughly $2,000 to $3,000 per year for 30 years. Over the life of the loan, that is $60,000 to $90,000 in insurance alone. If you put down 10 percent instead, you pay insurance for only 11 years, cutting the total cost to roughly $22,000 to $33,000.

The only way to remove mortgage insurance before the scheduled drop-off date is to refinance into a conventional loan once you have built enough equity and your credit score has improved. Refinancing costs $2,000 to $5,000 in closing costs, so it only makes sense if you plan to stay in the home long enough to recoup that cost through lower payments.

Interest rates and monthly payments without a down payment

Lenders charge higher interest rates on zero-down and low-down loans because they have more at risk. If the home loses value or you stop paying, the lender may not recover the full loan amount. On the day you apply, a zero-down FHA loan might carry an interest rate 0.25 to 0.75 percentage points higher than a conventional loan with 20 percent down.

On a $300,000 home, that difference adds $50 to $150 per month to your payment. Combined with mortgage insurance, your total monthly payment (principal, interest, insurance, and property tax) could be $300 to $400 higher than if you had saved a 20 percent down payment.

VA and USDA loans often have lower interest rates than FHA loans because the government may provide is stronger. But rates still vary by lender and by your credit score. Always get quotes from at least three lenders before you commit, because a difference of 0.25 percent in interest rate saves you thousands over 30 years.

Income, credit, and debt requirements

Without a down payment, lenders scrutinize your income and debt more carefully. They want to see that you can afford the payment even if your income drops or your expenses rise. Most lenders require a debt-to-income ratio of 43 percent or lower, meaning your total monthly debt payments (car loans, credit cards, student loans, and the new mortgage) cannot exceed 43 percent of your gross monthly income.

Credit score requirements vary: FHA loans typically require 580 or higher, VA loans have no official minimum but most lenders want 620 or higher, and USDA loans require 580 or higher. A score below 620 makes approval much harder and raises your interest rate. If your score is below 580, you will need to wait and build credit before you can may have access to for any of these programs.

Lenders will also verify your income with recent tax returns (usually two years), W-2 forms, and recent pay stubs. If you are self-employed, you need two years of tax returns and a profit-and-loss statement. If you have changed jobs in the past two years, the lender will ask why and may require a letter from your new employer confirming your position and salary.

Frequently Asked Questions

Can I use a VA or USDA loan to buy a second home or investment property?

No. Both programs require the home to be your primary residence—the place where you live most of the year. You cannot use these loans to buy a vacation home, a rental property, or a home you plan to flip. FHA loans also require primary residence use.

What if I have bad credit but want to buy with no money down?

You will need to wait and rebuild your credit first. Most lenders require a score of at least 580 for FHA or USDA loans, and 620 or higher for VA loans. If your score is below 580, focus on paying down existing debt and making all payments on time for 6 to 12 months before you apply.

Is it better to put down 3.5 percent on an FHA loan or save up for 10 percent?

Saving for 10 percent is better if you can afford to wait. You will pay mortgage insurance for only 11 years instead of 30, saving $30,000 to $60,000 over the life of the loan. But if you need to buy now and housing costs are rising in your area, a 3.5 percent down payment gets you into a home sooner.

Do I have to use a mortgage broker, or can I go directly to a bank?

You can go directly to a bank, credit union, or mortgage lender. Mortgage brokers work with multiple lenders and may find you a better rate, but they charge a fee (usually 0.5 to 1 percent of the loan amount). Compare offers from at least three sources—banks, credit unions, and one broker—before you decide.

What happens if the home appraisal comes in lower than the purchase price?

You have three options: renegotiate the price down to the appraised value, make up the difference in cash, or walk away. Most buyers in this situation renegotiate. The seller may refuse, in which case you lose your earnest money deposit (usually 1 to 3 percent of the purchase price) unless your contract includes an appraisal contingency that lets you back out without penalty.