Yes, but only through specific loan types that shift the risk to the lender
You can get a mortgage without a down payment, but the lender absorbs more risk, so they charge higher interest rates and require stronger income and credit. The main routes are VA loans (for military members and veterans), USDA loans (for rural properties), and conventional loans with lender-paid mortgage insurance. FHA loans technically require 3.5% down, so they are not truly zero-down, though that is the lowest conventional option. Each has different rules about property type, location, income limits, and what the lender will accept.
The catch is that without your own money in the deal, the lender needs other proof you will not walk away. That means a solid credit score (usually 620 or higher), steady income documentation, and sometimes a co-signer. The monthly payment will be higher than it would be with a down payment because you are borrowing the full purchase price plus mortgage insurance costs.
Key Takeaways
- VA loans and USDA loans are the only true zero-down options; conventional loans require at least some down payment, though FHA allows as little as 3.5%.
- Without a down payment, lenders charge higher interest rates and require mortgage insurance, raising your monthly payment significantly.
- You will need a credit score of at least 620, stable income history, and often a debt-to-income ratio below 43% to be considered.
- The property type and location matter: VA loans work anywhere, USDA loans only in rural areas, and some lenders have stricter rules about property condition.
VA loans: no down payment, no mortgage insurance
If you are a current or former military member, a surviving spouse, or a National Guard member with sufficient service, you may be able to use a VA loan. These are backed by the Department of Veterans Affairs and require zero down payment and zero mortgage insurance. The lender is protected by the VA's may provide, which means the government promises to cover part of the loss if you default.
To use a VA loan, you need a Certificate of may be able to access from the VA, which you can request online through VA.gov or through your lender. The process takes a few days to a few weeks. You will still need a credit score (usually 620 or higher, though some lenders go lower), proof of income, and a debt-to-income ratio the lender accepts. Interest rates on VA loans are typically lower than conventional rates because the government backing reduces the lender's risk.
VA loans do have a funding fee, which is a one-time charge added to the loan amount. The fee ranges from 1.4% to 3.6% of the loan amount depending on your service category and whether you have a down payment (even though you do not need one). You can roll this fee into the loan, so you do not pay it upfront.
USDA loans: zero down for rural properties
The USDA Rural Development loan program offers zero-down mortgages for properties in designated rural areas. The USDA defines rural broadly—it includes many suburbs and small towns, not just farms. You can check whether a specific address qualifies on the USDA website by entering the property address.
USDA loans require a credit score of at least 640 for most lenders, though some will go to 620. You must have a stable income and a debt-to-income ratio below 43% (some lenders allow up to 50% in certain cases). Like VA loans, USDA loans include a may provide fee, which is typically 1% to 2% of the loan amount and can be rolled into the loan.
USDA loans also require mortgage insurance, called a may provide fee, paid annually. This is built into your monthly payment. The total cost—interest plus insurance—is still often lower than a conventional loan with a down payment because USDA rates are competitive and the program is designed to make homeownership affordable in rural areas.
Conventional loans with lender-paid mortgage insurance
Some conventional lenders will offer zero-down mortgages by charging you a higher interest rate and adding mortgage insurance to your monthly payment. This is called lender-paid mortgage insurance (LPMI). The lender covers the insurance cost upfront and recoups it by charging you a higher rate for the life of the loan.
The trade-off is that you pay more per month forever, even after you build equity. With a traditional down payment, you can remove mortgage insurance once you reach 20% equity. With LPMI, you cannot. This makes LPMI more expensive over time, but it can work if you plan to sell or refinance within a few years, or if you cannot save a down payment and need to buy now.
You will need a credit score of at least 680 to 700 for most lenders offering LPMI, and your debt-to-income ratio must be below 43%. The interest rate will be 0.5% to 1% higher than a conventional loan with 20% down, which adds up significantly over 30 years.
FHA loans: the lowest down payment option
FHA loans technically require a 3.5% down payment, so they are not truly zero-down, but they are the lowest conventional option. FHA loans are backed by the Federal Housing Administration and are designed for first-time buyers and people with lower credit scores. You can may have access to with a credit score as low as 580 (though 620 is more common).
The 3.5% down payment can come from your own savings, a gift from a family member, or a grant program in your area. Some nonprofits and state programs offer down payment assistance specifically for FHA loans. The monthly payment includes mortgage insurance, which you pay for the life of the loan if you put down less than 10%.
FHA loans have lower interest rates than some conventional loans because the government backing reduces lender risk. However, the mortgage insurance cost is higher than conventional insurance, so your total monthly payment may be similar to or higher than a conventional loan with a small down payment.
What lenders actually check when there is no down payment
Without your own money in the deal, lenders focus heavily on income stability and credit history. They will ask for two years of tax returns, recent pay stubs, and bank statements showing you can cover the down payment (even though you do not need one—they want to see you have savings). If you are self-employed, expect to provide more documentation and possibly a CPA letter.
Your debt-to-income ratio becomes critical. This is your total monthly debt payments divided by your gross monthly income. Most lenders want this below 43%, though some allow up to 50% for VA or USDA loans. Existing car loans, credit card payments, student loans, and child support all count. If your ratio is too high, you may need to pay down debt before applying.
Credit score matters, but it is not the only factor. A score of 620 to 640 is the minimum for most zero-down programs, but lenders also look at payment history, recent late payments, and how much credit you are using. A recent bankruptcy or foreclosure will disqualify you from most programs, though waiting periods vary (usually 2 to 7 years depending on the program).
The real cost of borrowing the full purchase price
When you borrow 100% of the purchase price, your monthly payment includes principal, interest, property taxes, homeowners insurance, and mortgage insurance. On a $300,000 home with no down payment, a 30-year mortgage at 7% interest, you would pay roughly $2,000 per month in principal and interest alone, plus insurance and taxes. With a 20% down payment ($60,000), the same home would cost roughly $1,680 per month in principal and interest.
The difference compounds over time. Over 30 years, borrowing the full amount costs tens of thousands of dollars more in interest. Mortgage insurance adds another $150 to $300 per month depending on the loan type and your credit score. This is why lenders prefer down payments—they reduce the amount borrowed and the risk of default.
However, if you cannot save a down payment and interest rates are low, buying now and building equity may be better than renting and waiting. You should compare the total cost of a zero-down mortgage against renting for the same period, accounting for rent increases, maintenance costs, and the equity you build.
Frequently Asked Questions
Can I get a zero-down loan if I have bad credit?
Most zero-down programs require a credit score of at least 620, and some require 640 or higher. If your score is below 620, you may not may have access to for VA, USDA, or conventional loans. FHA loans allow scores as low as 580, but you would still need the 3.5% down payment. Consider working with a credit counselor to improve your score before applying.
What if I do not have two years of income history?
Most lenders require two years of tax returns or pay stubs to verify income. If you just started a job, changed careers, or are self-employed, you may need a co-signer or additional documentation like a job offer letter. Some lenders will accept one year of history if you can show the income is stable and likely to continue.
Can a family member gift me a down payment for a zero-down loan?
For FHA loans, yes—a family member can gift the 3.5% down payment. For VA and USDA loans, you do not need a down payment, so a gift is not necessary. However, lenders will ask for a gift letter stating the money is a gift, not a loan you have to repay. The gift must be documented and cannot come with strings attached.
Will my interest rate be much higher with no down payment?
VA and USDA loans typically have competitive interest rates because government backing reduces lender risk. Conventional zero-down loans with LPMI will have rates 0.5% to 1% higher than conventional loans with 20% down. Over 30 years, this adds up to tens of thousands of dollars in extra interest.
What happens if the home is worth less than the loan amount?
If the home value drops and you owe more than it is worth, you are underwater. This makes it harder to sell or refinance. With a down payment, you have a buffer—the home would need to drop significantly before you owe more than it is worth. This is one reason lenders charge more for zero-down loans: they are taking on more risk.