Yes, but only through specific government-backed programs, and they come with real trade-offs
You can get a mortgage with zero down payment, but not from most lenders and not on most properties. The main routes are VA loans (for military veterans and active-duty service members), USDA loans (for rural properties), and some FHA loans (which technically allow 3.5% down, not zero, but are the closest conventional lenders come). Each has different rules about who qualifies, where you can buy, and what you'll pay over the life of the loan.
The catch: zero-down mortgages almost always mean higher interest rates, mandatory mortgage insurance, and stricter income or property requirements. A lender taking on more risk charges you for it. You need to understand what that costs before you decide whether no down payment actually saves you money.
Key Takeaways
- VA loans and USDA loans are the only true zero-down options; FHA loans require 3.5% down but are easier to get than conventional mortgages.
- Zero-down mortgages come with higher interest rates and mortgage insurance costs that add thousands to what you pay over time.
- VA loans require military service or veteran status; USDA loans require a rural property and income limits based on area median income.
- You still need good credit, stable income, and a debt-to-income ratio under 50% for most zero-down programs.
- Saving even a small down payment (3–5%) often results in lower total costs than going zero-down, depending on current rates and your credit score.
VA loans: zero down for veterans and active-duty service members
A VA loan is backed by the U.S. Department of Veterans Affairs and requires no down payment. You must be a veteran, active-duty service member, National Guard or Reserve member, or surviving spouse of someone who died in service or from a service-connected disability. You'll 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 have no mortgage insurance requirement, which is a major advantage over FHA and USDA loans. However, you will pay a one-time VA funding fee (typically 2.3% of the loan amount for first-time users, lower for subsequent loans, and waived for disabled veterans rated by the VA). This fee is usually rolled into the loan, so you don't pay it upfront, but you do pay interest on it for 30 years.
Interest rates on VA loans are often competitive with or better than conventional mortgages because the VA may provide reduces the lender's risk. You still need a credit score of at least 620 (many lenders prefer 640+), stable income, and a debt-to-income ratio under 41% for most lenders, though some will go to 50%.
USDA loans: zero down for rural and suburban properties
A USDA loan is backed by the U.S. Department of Agriculture and requires no down payment if you're buying in an may be able to access rural or suburban area. The USDA defines "rural" broadly—it includes many towns and suburbs outside major cities, not just farms. You can check whether a specific address qualifies on the USDA's website.
You must meet income limits, which vary by county and household size. Generally, your household income cannot exceed 115% of the area median income for your county. A family of four in a rural county might have a limit of $90,000 to $110,000, depending on location. USDA loans also require a debt-to-income ratio under 41% for most lenders.
USDA loans require mortgage insurance, which adds to your monthly payment. The upfront insurance premium is 1% of the loan amount (rolled into the loan), and the annual insurance premium is typically 0.35% to 0.55% of the loan balance per year. Like VA loans, USDA loans often have competitive interest rates because the government may provide reduces lender risk.
FHA loans: 3.5% down, the closest thing to zero-down for most buyers
An FHA loan requires a minimum 3.5% down payment, not zero, but it's the most accessible option for buyers with lower credit scores or limited savings. FHA loans are insured by the Federal Housing Administration and available through most lenders. You need a credit score of at least 580 to put down 3.5%; if your score is 500–579, you'll need 10% down.
FHA loans require mortgage insurance in two forms: an upfront premium (1.75% of the loan amount, usually rolled into the loan) and an annual premium (0.55% to 0.80% of the loan balance per year, depending on your down payment and loan term). This insurance stays on your loan for the full 30 years unless you put down at least 10%, in which case it drops after 11 years.
The advantage of FHA loans is flexibility: you can use gift money for the down payment, you don't need a perfect employment history, and lenders are more forgiving of past credit problems. The disadvantage is that the mortgage insurance cost is substantial over time. A $300,000 FHA loan with 3.5% down will cost roughly $10,000 to $15,000 in mortgage insurance alone over 30 years.
What zero-down mortgages actually cost you
A zero-down mortgage sounds free, but the costs are real. Compare a $300,000 home purchase three ways: 20% down conventional, 3.5% down FHA, and zero-down VA or USDA.
| Scenario | Down Payment | Loan Amount | Mortgage Insurance | Interest Rate (example) | Monthly Payment (P&I only) |
|---|---|---|---|---|---|
| 20% down conventional | $60,000 | $240,000 | None | 6.5% | $1,520 |
| 3.5% down FHA | $10,500 | $289,500 | ~$12,000 over life of loan | 6.8% | $1,930 |
| Zero-down VA or USDA | $0 | $300,000 | VA: ~$6,900 fee; USDA: ~$9,000 insurance over life of loan | 6.6% | $1,799 |
The monthly payment difference between zero-down and 20% down is roughly $280 per month in this example. Over 30 years, that's $100,800 more. However, if you don't have $60,000 saved, the real comparison is between zero-down and not buying at all. In that case, zero-down makes sense if you have stable income and can afford the higher payment.
Credit score and income requirements for zero-down mortgages
All zero-down programs require you to prove you can actually pay the mortgage. Lenders look at three things: credit score, income, and debt-to-income ratio.
Credit score: VA loans typically require 620 or higher, though some lenders go lower. USDA loans also typically require 620 or higher. If your score is below 620, you may not may have access to for zero-down programs, and FHA (3.5% down) becomes your best option.
Income: You need documented, stable income. This can be W-2 wages, self-employment income (usually averaged over two years), Social Security, disability payments, or pension income. Recent job changes or gaps in employment can slow the process but don't automatically disqualify you.
Debt-to-income ratio: This is your total monthly debt payments (mortgage, car loans, credit cards, student loans, child support) divided by your gross monthly income. Most lenders cap this at 41% to 50% for zero-down loans. If you earn $5,000 per month and have $1,500 in existing debt, your new mortgage payment can be roughly $500 to $550 maximum.
When a small down payment actually costs less than zero-down
Saving 3% to 5% for a down payment sometimes results in lower total costs than going zero-down, depending on interest rates and your credit score. Here's why: lenders offer better rates to buyers with skin in the game. A buyer with 5% down might get a 6.4% rate, while a zero-down buyer gets 6.7%. Over 30 years on a $300,000 loan, that 0.3% difference saves roughly $30,000.
Additionally, mortgage insurance on FHA loans (3.5% down) stays for 30 years unless you put down 10%. If you can save 10%, you eliminate that insurance after 11 years, cutting your long-term costs significantly. The math changes based on current rates, your credit score, and how long you plan to stay in the home. A mortgage broker or lender can run the numbers for your specific situation.
If you're deciding between zero-down now and waiting six months to save 5%, the answer depends on whether home prices and interest rates are rising or falling in your market. If prices are rising faster than you can save, zero-down may be the better move. If the market is stable or cooling, waiting to save a down payment often pays off.
Frequently Asked Questions
Can I get a zero-down mortgage if I have bad credit?
Not through VA, USDA, or FHA programs, which typically require a credit score of 580 or higher. If your score is below 580, you'll need to work on improving it before explore. Credit repair takes time—typically three to six months of on-time payments and reduced debt can raise your score enough to may have access to.
What if I'm not a veteran and don't have a rural property?
FHA loans with 3.5% down are your main option. Conventional zero-down mortgages exist but are rare and usually require excellent credit (740+), significant income, and substantial assets. Your best move is to save 3% to 5% and explore for an FHA loan, or explore whether a property you're considering qualifies as rural for USDA purposes.
Do I have to pay the mortgage insurance upfront?
No. On FHA, VA, and USDA loans, mortgage insurance premiums are rolled into the loan amount, so you pay them over time with interest. You don't need cash at closing for insurance. However, you do need cash for closing costs (typically 2% to 5% of the purchase price), which cover appraisal, title search, and lender fees.
Can I use a gift for the down payment on a zero-down loan?
On zero-down VA and USDA loans, there is no down payment to gift. However, if you're considering an FHA loan (3.5% down) instead, yes—you can use a gift from a family member to cover the down payment. The lender will require a gift letter stating the money is a gift, not a loan you have to repay.
What happens if I can't afford the monthly payment after I get the mortgage?
Contact your lender when ready. Most lenders offer loan modification programs that can lower your payment by extending the loan term, reducing the interest rate, or adding missed payments to the end of the loan. Waiting until you're 30 days late makes modification harder. The sooner you reach out, the more options you have.