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

You can buy a house without a down payment, but you cannot walk into most lenders and ask for it. The programs that allow zero down exist, but they are narrow, carry higher costs, and require you to meet stricter conditions than a buyer putting money down. The main routes are VA loans (for military members and veterans), USDA loans (for rural properties), and some FHA loans with mortgage insurance. Conventional loans almost always require at least 3 to 5 percent down.

The reason lenders usually want a down payment is simple: it protects them if you stop paying. With no down payment, you owe more than the house is worth from day one, which means the lender absorbs the loss if you default and they have to sell. That risk gets passed to you through higher interest rates, mandatory mortgage insurance, or stricter income and credit requirements.

Key Takeaways

  • VA loans and USDA loans genuinely allow zero down, but VA loans are only for military-connected borrowers and USDA loans only for properties in designated rural areas.
  • FHA loans allow as little as 3.5 percent down, not zero, and require mortgage insurance that stays on your loan for the life of the loan if you put down less than 10 percent.
  • Zero-down loans carry higher interest rates and stricter debt-to-income limits than conventional loans, so your monthly payment will be higher even if the sale price is the same.
  • Lenders will scrutinize your income, employment history, and credit more closely on a zero-down loan because they have no equity cushion if you default.

VA loans: zero down for military members and veterans

A VA loan is backed by the Department of Veterans Affairs and allows may be able to access borrowers to buy with zero down payment. You do not need to be currently serving — the program covers veterans, surviving spouses of veterans who died in service or from a service-connected disability, and active-duty service members. You will need 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 a down payment and do not require mortgage insurance. However, most VA loans carry a funding fee — a one-time charge paid at closing that ranges from 1.4 to 3.6 percent of the loan amount, depending on your branch, rank, and whether you have used a VA loan before. You can roll this fee into your loan balance, which means you borrow more but do not pay it upfront. The interest rate on a VA loan is typically lower than on FHA or conventional loans, which can offset the funding fee over time.

The catch: VA loans have a maximum loan amount that varies by county, and in high-cost areas that limit may not cover the full price of the house you want. You can borrow above the county limit, but then you would need to cover the difference with a down payment.

USDA loans: zero down for rural properties

A USDA loan is backed by the U.S. Department of Agriculture and allows zero down payment for properties in designated rural areas. The USDA defines "rural" broadly — it includes small towns and areas outside city limits, not just farmland. You can check whether a specific address qualifies on the USDA's website before you start house hunting.

Like VA loans, USDA loans do not require a down payment and do not require mortgage insurance in the traditional sense. Instead, there is an upfront may provide fee (typically 1 percent of the loan amount) and an annual fee (0.35 percent of the loan balance per year). Both can be rolled into the loan, so you do not pay them out of pocket. USDA loans also have income limits — you cannot earn more than 115 percent of the median income for your county, though there are exceptions for rural areas with persistent poverty.

USDA loans are slower to close than conventional or VA loans because the USDA must verify the property qualifies and the lender must follow USDA underwriting rules. Expect 45 to 60 days from application to closing, compared to 30 to 45 days for a conventional loan.

FHA loans: 3.5 percent down, not zero

FHA loans are insured by the Federal Housing Administration and allow as little as 3.5 percent down. This is not zero, but it is the lowest down payment available to most borrowers without military service or a rural property. An FHA loan on a $300,000 house would require $10,500 down.

FHA loans require mortgage insurance, and this is where the cost adds up. If you put down less than 10 percent, the mortgage insurance stays on your loan for the entire 30-year term — you cannot remove it even after you build equity. The insurance premium is typically 0.55 to 0.8 percent of the loan amount per year, added to your monthly payment. On a $300,000 loan, that is $165 to $240 per month for the life of the loan.

FHA loans are easier to get than conventional loans if your credit is below 620 or your debt-to-income ratio is high. Lenders will approve FHA loans with credit scores as low as 500 (though 580 is more common), whereas conventional loans usually require 620 or higher.

What zero-down loans cost you in interest and fees

A zero-down loan does not mean a free loan. The lender recovers the risk through higher interest rates, mandatory insurance, or both. On the same day, with the same credit score, a borrower with 20 percent down might get a 6.5 percent rate, while a zero-down borrower might get 7.0 or 7.2 percent. Over 30 years, that 0.5 to 0.7 percent difference adds up to tens of thousands of dollars.

Add in mortgage insurance (on FHA loans) or a funding fee (on VA loans), and your total monthly payment can be 15 to 25 percent higher than a buyer with a conventional loan and 20 percent down. On a $300,000 house, that might mean $400 to $600 more per month.

The trade-off is that you buy sooner instead of saving for years. If you stay in the house long enough, the lower purchase price and faster entry into homeownership can outweigh the higher rate. If you sell or refinance within 5 to 10 years, the higher costs may not have been worth it.

Income and debt limits are stricter on zero-down loans

Lenders use a debt-to-income ratio to decide how much you can borrow. This is your total monthly debt payments (car loans, credit cards, student loans, the new mortgage) divided by your gross monthly income. Most conventional lenders allow up to 43 percent; some go to 50 percent for strong borrowers.

VA and USDA lenders are often stricter. VA lenders typically cap you at 41 percent debt-to-income, and USDA lenders at 41 to 43 percent. FHA lenders may allow up to 50 percent, but only if your credit and savings history are very strong. If your debt-to-income is already high, a zero-down loan may not be available to you even if you meet other requirements.

Lenders also scrutinize employment history more closely on zero-down loans. They want to see at least two years of stable income in the same field. A recent job change, a gap in employment, or self-employment income that varies year to year can slow approval or result in a denial.

How to start the process

First, determine which programs you might may have access to for. If you have military service, contact a VA lender or visit VA.gov to request your Certificate of may be able to access. If you are looking at a rural property, check the USDA's property lookup tool to confirm it qualifies. If neither applies, get pre-approved for an FHA loan through a bank, credit union, or mortgage broker.

Pre-approval is not the same as approval — it means the lender has reviewed your income, credit, and debts and believes you can borrow a certain amount. Pre-approval is free and does not lock you into that lender. Shop around: rates and fees vary significantly between lenders, and a difference of 0.25 percent in interest rate can save you tens of thousands over 30 years.

Once you are pre-approved and have found a property, the lender will order an appraisal. On a zero-down loan, the appraisal is critical — if the house appraises for less than the sale price, you may have to cover the difference with cash or renegotiate the price. With a down payment, you have a buffer; with zero down, you do not.

Frequently Asked Questions

Can I use a gift for a down payment instead of getting a zero-down loan?

Yes, and it may be cheaper. A gift from a family member counts as a down payment on most loans. You will need a gift letter from the donor stating it is a gift, not a loan. A 5 to 10 percent gift down payment avoids mortgage insurance (on conventional loans) and lowers your interest rate, which can save more than the cost of waiting to save the money yourself.

What happens if the house appraises for less than the sale price on a zero-down loan?

You have three options: pay the difference in cash, renegotiate the sale price with the seller, or walk away. The lender will not lend more than the appraised value, so with zero down, you cannot make up the gap by borrowing more. This is a real risk on zero-down loans in hot markets where prices are rising faster than appraisals catch up.

Can I get a zero-down loan if my credit score is below 600?

VA and USDA loans do not have a minimum credit score requirement, though most lenders will want 580 or higher. FHA loans officially allow 500, but most lenders require 580. If your score is lower, you may need to work with a credit union or a lender that specializes in lower-credit borrowers, and you should expect a higher interest rate.

Is it better to put down 3.5 percent on an FHA loan or wait and save for 20 percent?

It depends on how long you plan to stay and how fast prices are rising in your market. If you stay fewer than 7 to 10 years, the mortgage insurance cost may outweigh the benefit of buying sooner. If prices are rising 5 percent per year and you wait two years to save 20 percent, you may pay more in higher purchase price than you save in lower insurance costs.

Do I have to use the same lender for pre-approval and closing?

No. Pre-approval is portable — you can shop your pre-approval letter to multiple lenders and compare final offers before you commit. Many borrowers get pre-approved with one lender, then lock in a better rate with another. Do this before you make an offer on a house, not after.