Yes, but only through specific loan programs that exist for this purpose

You can buy a house with zero down payment, but only if you meet the requirements of a loan program designed to allow it. The most common are VA loans (for military members and veterans), USDA loans (for rural properties), and FHA loans with down payment assistance (for first-time buyers in some cases). Conventional loans from most banks require at least 3 to 5 percent down. No-down-payment mortgages exist because these programs were created to expand homeownership to specific groups, not because lenders prefer lending without a down payment.

The trade-off is real: without a down payment, you pay more in interest over the life of the loan, you may pay mortgage insurance (which protects the lender, not you), and your monthly payment will be higher than if you had put money down. You also have less equity cushion if the home's value drops. Lenders offset the risk by being stricter about your credit score, income verification, and the property itself.

Key Takeaways

  • VA loans and USDA loans are the most straightforward no-down-payment options, but VA loans require military service and USDA loans require a rural property location.
  • FHA loans allow as little as 3.5 percent down, and some state or local programs may cover that percentage for first-time buyers, making the effective down payment zero.
  • Without a down payment, you will pay mortgage insurance premiums monthly (except on VA loans), which increases your total cost over time.
  • Lenders will scrutinize your credit score, debt-to-income ratio, and employment history more carefully on no-down-payment loans than on conventional mortgages.

VA loans: no down payment if you have military service

A VA loan is backed by the U.S. Department of Veterans Affairs and requires no down payment if you are a current or former member of the military, National Guard, or Reserves, or the surviving spouse of someone who died in service or from a service-related injury. You must obtain a Certificate of may be able to access from the VA, which you can request online through VA.gov or through your lender.

VA loans do not require mortgage insurance, which saves you hundreds of dollars per month compared to FHA or conventional loans. The interest rate is typically lower than conventional mortgages. The trade-off is that you pay a one-time funding fee (usually 2 to 3.6 percent of the loan amount), though this can be rolled into the loan itself so you do not pay it upfront. If you are receiving VA disability compensation, you may be exempt from the funding fee.

You still need to pass a credit check and debt-to-income review. Most lenders want a credit score of 620 or higher, though some accept lower scores. The property must appraise at or above the purchase price, and the lender will verify your income and employment. VA loans have no maximum loan amount set by the VA itself, though individual lenders set their own limits.

USDA loans: no down payment for rural properties

A USDA loan is backed by the U.S. Department of Agriculture and requires no down payment if the property is in a rural area that meets USDA guidelines. The USDA defines rural broadly—it includes many small towns and suburbs, not just farmland. You can check whether a specific address qualifies on the USDA's website by entering the zip code or street address.

USDA loans have income limits that vary by county and family size. In most areas, a family of four cannot earn more than about 115 percent of the area median income, though this varies. You must be a U.S. citizen or permanent resident and occupy the home as your primary residence. Like FHA loans, USDA loans require mortgage insurance (both an upfront fee and an annual premium), which adds to your monthly payment.

The application process is similar to a conventional mortgage: you need a credit score (typically 640 or higher, though some lenders accept lower), proof of income, and employment history. The property must appraise at or above the purchase price. USDA loans are available through approved lenders, not directly from the USDA, so you apply through a bank or mortgage company that offers them.

FHA loans with down payment assistance programs

An FHA loan allows as little as 3.5 percent down, which is not zero but is much lower than conventional loans. Some state and local down payment assistance programs will cover that 3.5 percent for first-time homebuyers, making your effective down payment zero. These programs vary by location and change frequently—some are funded, some are not, and some have waiting lists.

To find out whether your state or city has a down payment assistance program, contact your state housing finance agency (search "[your state] housing finance agency" online) or call 211 to be referred to local programs. Some programs require you to complete a homebuyer education course before you can use them. Others have income limits or restrict the purchase price of the home.

FHA loans require mortgage insurance, both an upfront premium (1.75 percent of the loan amount, usually rolled into the loan) and an annual premium paid monthly. The annual premium stays on your loan for the life of the loan if you put down less than 10 percent. This adds significantly to your monthly payment. You need a credit score of at least 580 to may have access to for an FHA loan with 3.5 percent down (a higher score may be required by individual lenders).

What lenders check more carefully on no-down-payment loans

When you put no money down, the lender is taking on more risk, so they scrutinize your finances more closely. They will pull your credit report and look at your payment history on credit cards, car loans, and other debts. A late payment from two years ago may not disqualify you, but recent late payments (within the last year or two) often do. Most lenders want a credit score of at least 620 to 640, though VA and USDA programs sometimes accept lower scores.

Lenders calculate your debt-to-income ratio, which is your total monthly debt payments (including the new mortgage) divided by your gross monthly income. Most lenders want this ratio to be 43 percent or lower, meaning your debts should not exceed 43 percent of what you earn before taxes. If you have student loans, car payments, credit card balances, or child support obligations, these all count against you.

Employment history matters more on no-down-payment loans. Lenders want to see that you have been in your current job for at least two years, or that you work in a field where job-hopping is normal (like contract work). A recent job change may slow your application or require additional documentation. Self-employed borrowers face extra scrutiny and usually need to provide two years of tax returns.

The cost of no down payment: mortgage insurance and interest

The biggest cost of buying with no down payment is mortgage insurance, which protects the lender if you default, not you. On FHA loans, you pay an upfront mortgage insurance premium of 1.75 percent of the loan amount (rolled into the loan) plus an annual premium of 0.55 to 0.8 percent of the loan amount per year, paid monthly. On USDA loans, the upfront fee is 2 percent and the annual premium is 0.35 percent. VA loans do not require mortgage insurance at all.

On a $300,000 FHA loan with no down payment, the upfront insurance premium adds $5,250 to your loan balance. The annual premium of about $1,650 to $2,400 per year gets split into monthly payments of roughly $138 to $200. Over 30 years, mortgage insurance can add $50,000 or more to the total cost of your home.

Interest rates on no-down-payment loans are also typically higher than on conventional loans with a down payment. The difference may be 0.25 to 0.5 percent, which sounds small but adds tens of thousands of dollars over 30 years. On a $300,000 loan, a 0.5 percent higher interest rate costs roughly $40,000 more in interest over the life of the loan.

What happens if the home's value drops

If you buy with no down payment and the home's value falls, you can end up underwater—owing more than the home is worth. This is not immediately a problem if you plan to stay in the home and keep making payments. But if you need to sell or refinance, you cannot borrow against the home's equity because there is none.

During the 2008 housing crisis, many homebuyers with no down payment and adjustable-rate mortgages found themselves unable to refinance when rates rose or when their home's value dropped. This is less likely with today's fixed-rate mortgages and stricter lending standards, but it remains a risk. If you buy with no down payment, plan to stay in the home for at least five to seven years to give yourself time to build equity and for the market to recover if it dips.

Frequently Asked Questions

Do I have to be a first-time homebuyer to get a no-down-payment loan?

VA and USDA loans do not require you to be a first-time buyer. FHA loans also do not technically require it, though some down payment assistance programs do. Check the specific program's rules before you apply.

Can I get a no-down-payment loan if my credit score is below 620?

VA and USDA loans sometimes accept credit scores below 620, though most lenders prefer 620 or higher. FHA loans typically require at least 580 for a 3.5 percent down loan. If your score is lower, you may need to wait and build credit, or work with a lender that specializes in lower-score borrowers (though they may charge higher interest rates).

What if I do not may have access to for VA, USDA, or FHA?

Conventional lenders rarely offer zero-down mortgages, but some credit unions and portfolio lenders (banks that keep loans on their own books rather than selling them) do. You can also explore down payment assistance programs in your state or city, which may cover the down payment on a conventional loan. Contact your state housing finance agency or call 211 to find local programs.

Can I use a gift from family to cover the down payment instead?

On FHA and conventional loans, yes—the gift must come from a family member and you usually need a signed letter stating it is a gift, not a loan. VA and USDA loans also allow gifts. The lender will verify the source of the money to prevent fraud.

Will I ever be able to remove the mortgage insurance?

On FHA loans with less than 10 percent down, mortgage insurance stays for the life of the loan—you cannot remove it by refinancing into a conventional loan unless you refinance to a new loan with at least 20 percent equity. On USDA loans, mortgage insurance also stays for the life of the loan. VA loans have no mortgage insurance to remove.