Yes, but only through specific loan programs that exist for this purpose
You can buy a house without putting money down, but you cannot do it through a conventional mortgage. Instead, you use a loan program designed to cover the full purchase price: a VA loan (if you are a veteran or active-duty service member), a USDA loan (if you are buying in a rural area and meet income limits), or an FHA loan with a co-signer or gift funds. Each program has different rules about who qualifies, what property types work, and what you pay in return for no down payment.
The trade-off is real: you will pay a higher interest rate, higher monthly mortgage insurance, or both. The lender is taking on more risk because you have no equity in the house from day one. That extra cost compounds over 30 years. You should compare the total cost of a no-down-payment loan against putting down 3 to 5 percent and taking a conventional mortgage before you decide which route makes sense for your situation.
Key Takeaways
- VA loans and USDA loans are the only programs that truly require zero down payment with no workarounds; FHA loans require either 3.5 percent down or a gift from a family member.
- VA loans are available only to veterans, active-duty service members, and surviving spouses; USDA loans require you to buy in a designated rural area and meet income limits based on your county.
- No-down-payment loans carry higher interest rates and mortgage insurance costs that add thousands of dollars over the life of the loan compared to putting money down.
- Your credit score, debt-to-income ratio, and employment history matter more when you have no down payment, because the lender has no cushion if you default.
VA loans: zero down for veterans and active-duty service members
A VA loan is issued by a private lender but may provide by the Department of Veterans Affairs. The may provide means the VA will cover part of your loss if you stop paying, so lenders will finance 100 percent of the purchase price with no down payment required. You do not need to be a veteran who served in combat or for a specific length of time—the rules vary by era of service, but most people who served on active duty for at least 90 consecutive days may have access to, as do surviving spouses of service members who died in service or from a service-related injury.
To use a VA loan, you need a Certificate of may be able to access, which you request from the VA through its website or by mail. The process takes a few days to a few weeks. You will also pay a VA funding fee (a one-time charge that ranges from 1.4 to 3.6 percent of the loan amount, depending on your down payment and military history) unless you are exempt due to disability. This fee is rolled into your loan, so you do not pay it upfront, but it increases your total borrowing and your monthly payment.
VA loans have no prepayment penalty, no mortgage insurance requirement, and no maximum loan amount set by the VA itself—though individual lenders set their own caps. Interest rates on VA loans are typically lower than conventional rates, which offsets some of the cost of the funding fee.
USDA loans: zero down in rural areas with income limits
A USDA loan is backed by the U.S. Department of Agriculture and is designed to encourage homeownership in rural areas. Like a VA loan, it requires zero down payment. You must be buying a home in a USDA-designated rural area (which includes some suburbs and small towns, not just farmland) and your household income must fall below the limit for your county—limits vary widely but often range from $60,000 to $90,000 for a family of four, depending on location.
You apply for a USDA loan through a lender, not directly to the USDA. The lender checks your income against the county limit and verifies your may be able to access. You will pay a may provide fee (typically 2 percent of the loan amount) and an annual mortgage insurance premium (around 0.55 percent of the loan balance per year), both of which increase your monthly payment. Like VA loans, USDA loans have no prepayment penalty.
The main barrier is location: you can check whether a specific address qualifies using the USDA's online map tool. If the property is outside a rural area, you cannot use a USDA loan, even if you meet the income requirement.
FHA loans: 3.5 percent down, or zero with a gift
An FHA loan technically requires a 3.5 percent down payment, but you can cover that amount with a gift from a family member (spouse, parent, sibling, or sometimes a domestic partner, depending on the lender). The gift must be documented in writing and the donor cannot expect repayment. If you have a family member willing to give you the money, you can buy with zero of your own cash.
FHA loans are available to anyone who meets basic credit and income requirements—there is no military service requirement or rural-area restriction. However, you will pay mortgage insurance for the life of the loan (called LPMI, or loan-level price adjustment) because your down payment is so low. This insurance costs roughly 0.55 percent of your loan balance annually and is added to your monthly payment. Over 30 years, this adds tens of thousands of dollars to your total cost.
FHA loans also have limits on the maximum loan amount, which varies by county. In high-cost areas, the limit may not be enough to buy the home you want.
What happens to your monthly payment without a down payment
When you put zero down, your lender finances the entire purchase price. If you buy a $300,000 house, you borrow $300,000 instead of $285,000 (with a 5 percent down payment). That extra $15,000 in borrowing costs you roughly $80 more per month over 30 years, before accounting for interest rate differences.
On top of that, most no-down-payment loans carry mortgage insurance, which protects the lender if you default. On an FHA loan, this insurance is permanent and costs roughly $165 per month on a $300,000 loan. On a USDA loan, it is similar. On a VA loan, there is no mortgage insurance at all, which is one reason VA loans are often the cheapest option if you may have access to.
You should run the numbers with a lender for your specific situation. A VA loan with a 3.2 percent interest rate and no mortgage insurance may cost less per month than an FHA loan with a 4.1 percent rate and lifetime mortgage insurance, even though both require zero down. The only way to know is to get actual quotes.
Credit score, debt, and income requirements are stricter
Lenders scrutinize no-down-payment borrowers more carefully because they have no equity cushion. If you lose your job or the housing market drops, you are underwater immediately. Most lenders require a credit score of at least 580 for FHA loans and 620 for VA or USDA loans, though competitive rates usually require 640 or higher. Some lenders have higher minimums.
Your debt-to-income ratio (the percentage of your gross monthly income that goes to debt payments) also matters more. Most lenders cap this at 43 to 50 percent, meaning if you earn $5,000 per month, your total debt payments (mortgage, car loans, credit cards, student loans) cannot exceed $2,150 to $2,500. With no down payment, lenders often lean toward the lower end of that range.
Employment history is another factor. Lenders want to see stable income for at least two years. If you recently changed jobs, started a business, or had a gap in employment, you may need to explain it in writing or wait until your employment history looks more stable.
Comparing no-down-payment loans to putting money down
The choice between zero down and 3 to 5 percent down depends on your specific numbers. Here is what to compare:
| Loan Type | Down Payment | Mortgage Insurance | Interest Rate (typical) | Best For |
|---|---|---|---|---|
| VA Loan | 0% | None | 3.0–3.5% | Veterans and active-duty service members |
| USDA Loan | 0% | ~0.55% annually | 3.2–3.8% | Rural areas, income-may have access to buyers |
| FHA Loan | 3.5% (or gift) | ~0.55% annually (lifetime) | 3.5–4.2% | First-time buyers, lower credit scores |
| Conventional Loan | 5–20% | None (if 20% down) | 2.8–3.5% | Buyers with savings and good credit |
If you have $15,000 saved for a 5 percent down payment on a $300,000 house, compare the monthly payment on a conventional loan against a VA or USDA loan. The conventional loan will have a lower interest rate and no mortgage insurance, but you lose the $15,000 in cash. The no-down-payment loan keeps your cash but costs more per month. Over 10 years, which costs less? That is the real question.
Frequently Asked Questions
Can I use a no-down-payment loan to buy a second home or investment property?
No. VA, USDA, and FHA loans are all for primary residences only—the home you will live in most of the year. You cannot use them to buy a vacation home, rental property, or investment property. Conventional loans are your only option for those purchases.
What if I do not have a family member to give me a down payment gift for an FHA loan?
Then you would need to save the 3.5 percent yourself, or pursue a VA or USDA loan if you may have access to. There is no other way to get an FHA loan with zero of your own money. Some nonprofits offer down payment grants, but these are limited and competitive; you can search for programs in your area through the HUD website.
Do I have to pay the VA funding fee or USDA may provide fee upfront?
No. Both fees are rolled into your loan amount, so you pay them over time as part of your monthly mortgage payment. This means your actual loan balance is higher than the purchase price, but you do not need cash at closing.
Can I refinance a no-down-payment loan later to remove mortgage insurance?
On an FHA loan, mortgage insurance is permanent if you put down less than 10 percent, so refinancing to a conventional loan is your only way to remove it. On a USDA loan, you can refinance to remove insurance once you have 20 percent equity. On a VA loan, there is no insurance to remove.
What happens at closing if I have zero down payment?
You still pay closing costs (typically 2 to 5 percent of the purchase price), which cover the appraisal, title search, lender fees, and other expenses. These are not rolled into the loan—you need to pay them in cash or negotiate with the seller to cover them. This is often where buyers with zero savings get stuck, so ask your lender upfront whether the seller can pay your closing costs.